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Oil Prices Falter Despite Sharp Drop In Supplies

A big drop in supplies reported this week failed to prompt new buying in the crude oil market, which is retreating again today after earlier pulling back from its highest levels of the year. Traders again appear to be focusing on fears about the economy, suggesting most of the recent run up in prices was based on hopes, not fundamentals.

Indeed, that's just what the International Energy Agency said today in its latest outlook. "New bullish macroeconomic sentiment has not yet produced signs of oil demand recovery and oil market fundamentals remain weak," according to the IEA.

Nonetheless, this week's drop in U.S. supplies was the first after a long build up in stocks, according to the latest U.S. Petroleum Inventory.

To read Bryce Knorr's complete weekly energy review, click HERE.