Oil prices were largely unchanged from a week before on 22 April despite rising crude stocks in the US and a fall in demand in Europe on the back of a major volcanic eruption.

The European benchmark Brent contract for May was trading at $86.75 a barrel, up $0.13 a barrel from a week before, maintaining 18-month highs (MEED 22:4:10).

The contract had traded below $84 a barrel earlier in the week as aeroplanes were grounded across the continent because of a volcanic eruption in Iceland.

The Eyjafjallajökull eruption caused air traffic in Europe to fall by as much as 85 per cent, according to analysts at UK-based Barclays Capital. This led to an overall 4.2 million barrel drop in oil demand, the analysts say.

The US’ benchmark West Texas Intermediate (WTI) May contract was also trading at similar levels to those seen a week before, at $84.10 a barrel, down just $1.68 despite a 21 April report that showed a 1.9 million barrel gain in stocks of crude oil.

The US’ Energy Information Administration reported that inventories in the world’s largest energy consumer totalled 355.9 million barrels during the week ended 16 April, although this is still 14.7 million barrels lower than during the same period in 2009.

The average price for the international oil produced by the cartel Opec’s 12 members averaged $82 a barrel on 21 April, the last date information was available for at the time of writing. This was $0.62 lower than a week before.

Analysts attribute the return of prices to the mid-$80s a barrel to a fall in the value of the dollar against the European single currency, the euro, after a week of gains. One euro could buy $1.366 on 22 April.

Oil is traded in dollars, meaning that the value of the US’ currency affects its price. A stronger dollar makes it more expensive to buy in other currencies, pushing prices down, and a weak dollar tends to mean a higher oil price.