Oil Prices Rise But Further Decreases Likely

New York, NY, July 9, 2009--Oil prices rebounded to above $61 on Thursday, recouping some losses after tumbling 17 percent since last week.

But rising U.S. gasoline inventories suggested crude demand remains weak, fueling expectations that prices would resume their slide.

Benchmark crude for August delivery was up $1.15 to $61.29 a barrel by noon electronic trading in Europe on the New York Mercantile Exchange. On Wednesday, the contract fell more than 4 percent, or $2.79, to settle at $60.14.

Prices have dropped from an eight-month intraday high of $73.38 a barrel on June 30.

The Department of Energy reported Wednesday that gasoline in storage grew by another 1.9 million barrels last week, the fifth straight week that stocks have grown.

Other signals recently that the global economy and crude demand aren't recovering strongly from a severe slowdown have also helped undermine investor confidence. On Wednesday, the Organization of Petroleum Exporting Countries predicted that demand for crude has fallen so sharply, it will take another four years to recover to 2008 levels.

Last week, the U.S. and Europe reported the highest unemployment rates in decades.