In early trading on 5 June, the price of West Texas Intermediate oil fell back to $121.61 on the New York Mercantile Exchange, the lowest price since 15 May and a drop of almost 10 per cent since the all-time record of $135.09 set on 22 May.

It later rebounded to $123.88 in late morning trading, after the dollar dropped against the euro following a speech by Jean-Claude Trichet, president of the the European Central Bank, in which he said that European interest rates were likely to rise next month. An explosion at a Kuwait industrial park housing a major refinery also added to price pressures.

Investment bank Barclays Capital notes that oil prices are likely to remain in the $110-130 range for a while, as the market is still assessing supply and demand responses to the latest spike.