Brent oil price gives up gains, trading back under $72

Brent crude oil prices maybe in for a choppy ride this week after yesterday’s gain’s were quickly wiped out by grim reading US data which sent brent oil futures back under the $72 mark.

In London, Brent crude oil futures for August 2010 delivery was down to $71.54 a barrel at 07.45 GMT on the ICE Futures Exchange.

However, oil prices may get a boost on forecasts that the latest data would show that crude supplies in the US declined.

“The US inventory report may have a short term impact on oil prices. General expectations are of a drop in supply and that could help support oil prices.” a senior principal quoted at Purvin & Gertz in Singapore.

Meanwhile, doubts about the pace of the US economic recovery were offset by enthusiasm for China’s plan to bring forward $100 billion in infrastructure spending to 2010. This year’s $100 billion outlay will be targeted at 23 energy intensive projects, China’s National Development and Reform Commission reported.

Also, Brent oil prices may soon get a boost by a storm developing off Mexico’s Yucatan Peninsula which could force Gulf of Mexico oil production in its path to shut down.