Crude Oil Prices Drop To $83pb

World oil prices steadied on Friday, at the end of a volatile week in which the market was boosted by the easing volcanic ash crisis, but hit by sagging demand in key energy consumer nation, the United States.

New York’s main contract, light sweet crude for delivery in June, slid nine cents to $83.61 a barrel.

Brent North Sea crude for June added 22 cents to $85.89 per barrel in afternoon London trade.

Oil slumped at the start of the week, diving almost $2 on Monday amid continued concerns over fraud charges against Wall Street icon, Goldman Sachs, and the closure of European airports due to volcanic ash.

The market bounced back on Tuesday, rising dramatically on the back of optimism about the state of the economy and the prospect of transatlantic air travel resuming.

Traders reacted to a pickup in jet fuel demand as planes increasingly took to the skies after the travel chaos that was sparked by the volcanic ash cloud crisis.

The appearance of stellar Goldman Sachs first-quarter earnings also boosted the crude market.

Prices diverged on Wednesday and flattened on Thursday as traders reacted to rising US inventories that indicated weaker demand.

The US Department of Energy (DoE) revealed last week that US crude reserves increased 1.9 million barrels in the week ending April 16. This was against market expectations for a drop of 200,000 barrels.

Demand in the United States is closely monitored by the oil market because it is the world’s biggest economy and its biggest energy consumer.

The giant US economy is struggling to recover from the worst downturn since the 1930s.