Oil prices slip after strong day of gains

PanARMENIAN.Net - The price of oil eased back Wednesday, March 27 after a strong day of gains propelled by U.S. economic data suggesting a sustained recovery in the world's largest economy, The Associated Press reports.

Benchmark oil for May delivery fell 24 cents at midday Bangkok time to $96.10 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.53 to finish at a five-week high of $96.34 a barrel on the Nymex on Tuesday.

The U.S. Commerce Department said Tuesday that orders for factory-produced durable goods rose more than expected in February. Home prices also rose in January, according to the Standard & Poor's/Case-Shiller 20-city price index. That helped push up energy prices.

But analysts say it is too soon to forget about the debt crisis in Europe. The latest crisis point was Cyprus, which teetered on the brink of bankruptcy and collapse of its financial system until a deal was reached early Monday to provide some 10 billion euros ($12.9 billion) from international lenders. The deal, however, requires Cyprus to slash its oversized banking sector and inflict hefty losses on large depositors in troubled banks.

"The events in Cyprus have provided another very visible — albeit extreme — illustration of the financial problems and uncertainties in Europe which are holding back the global recovery," said analysts at Capital Economics in a market commentary. "Indeed, even though the Cypriot economy itself is tiny, the ramifications could still be felt worldwide, both in economic activity and in financial market volatility."

Brent crude, used to price many kinds of oil imported by U.S. refineries, rose 1 cent to $109.37 a barrel on the ICE Futures exchange in London.