Oil Recovery As Brent Crude Price Hits $40

The oil price has hit $40 for the first time since December after extending gains that have seen it recover from a sharp downturn.

Hopes of an improving global outlook and stronger sentiment for a recovery in turbulent markets saw the price of a barrel of Brent crude rise to $40 on Monday, the highest level for nearly three months - before edging slightly lower again.

Brent crude had tumbled close to $27 in January, its lowest level since 2003, amid a glut in oil supply and slowing world demand as the global economy stuttered.

The fall left it more than three quarters off its peak at more than $115 in the summer of 2014 and was accompanied by a turbulent period in stock markets.

Low oil prices have helped consumers by driving down the cost of petrol.

But energy companies and the suppliers and contractors they work with have been badly affected with thousands of jobs axed globally, including many in the North Sea.

Oil has turned higher more recently and was up again in latest trading, partly driven by a rally in Asian markets.

The crude price improvement was also helped by US energy (NasdaqCM: USEG - news) firms cutting back the number of oil rigs in operation.

However some analysts warned that the glut of oil could continue to drag on the price.