Oil prices were surging earlier today. But the rally has vanished.
The price of West Texas Intermediate crude oil on Tuesday rose to a high of $US58.98 from $US54.20, and then tumbled back to around $US56. Brent crude rose to a high of $US63.50 from about $US58.70, and dropped to around $US60.75.
At this point, there seems to be no obvious explanation for the move.
Oil has become the big story of 2014 since it began tumbling from its June highs. The plunge has been attributed to oversupply because of the US shale boom and deteriorating demand as Japan, Europe, China, and much of the developed and emerging economies slow or contract.
Oil-exporting countries like Russia and Norway have felt a lot of pain. Russia’s ruble crashed to all-time lows on Tuesday.
“Looking ahead, the depth of Russia’s problems and the consequences for the global financial markets will obviously depend on what happens next to the price of oil,” Capital Economics’ John Higgins said.