Oil hovered near $90 a barrel today as the US government continued to pressure on Iran over its nuclear plans.
Oil prices have been very volatile for much of this week, plunging and recovering sharply often during the course of a single trading session. It fell to a six-week low early yesterday, but before the end of the session it recovered to settle 3 per cent higher.
US crude stood 22 cents down at $90.01 by 13.30am, having jumped $2.74 in New York on yesterday. The rebound stemmed a sharp sell-off since the peak near $100 a barrel late last month on growing uncertainty about the US economy. London Brent was 16 cents down at $90.02.
Analysts list a range of factors that have influenced oil prices in recent days, some of them contradictory. These include OPEC's refusal this week to boost output, a big crude drawdown alongside a healthy oil products build-up in the United States, the US dollar, concerns about US economic growth and expectations of a warmer-than-usual winter.
"The movements of the last few days are not necessarily logical. There are a lot of question marks out there," said Societe Generale analyst Mike Wittner.
US President George W. Bush yesterday unveiled a plan to bail out troubled homeowners by freezing rate increases on adjustable-rate subprime mortgages for five years.