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Energy prices slide across the board
Source: Agencies |
April 9, 2010, Friday
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OIL and other energy prices stayed in lower territory yesterday as the stock market recovered from early losses and the Dow Jones Industrial Average inched toward the 11,000 mark.
Benchmark crude for May delivery fell 49 cents to settle at US$85.39 barrel on the New York Mercantile Exchange. Rising stocks helped pull up crude from a low of US$84.38 earlier in the day.
Stocks rose following news of solid bidding in the Treasury's 30-year bond auction. Reports of surprisingly strong March retail sales also helped buoy the market and offset earlier worries about Greece's lingering fiscal crisis.
Oil prices have recently tracked the performance of the stock market, particularly the S&P 500, as crude has become a major investment vehicle for financial companies.
"It's people who move money as opposed to people who move oil that determine what the price of oil will be," said Tom Kloza, chief oil analyst for Oil Price Information Service.
Kloza said that because financial companies have become major players in oil trading, "we're trading less on merits and more on perception of where the world economy is going."
It may be time for oil prices to take a breather after rising steadily in recent sessions.
Crude shot to an 18-month high above US$87 this week from US$69 in early February on optimism that oil demand would increase with a recovering global economy, although U.S. petroleum consumption remains weak.
"It appears that this energy rally may have about run its course," Ritterbusch and Associates said in a report. "We see absolutely nothing bullish about the oil fundamentals."
Meanwhile, the Energy Department reported on yesterday that natural gas inventories grew by 31 billion cubic feet, bringing the already bloated supply to about 1.67 trillion cubic feet for the week ended April 2.
Natural gas prices fell 11 cents to settle at US$3.909 per 1,000 cubic feet.
In other Nymex trading in May contracts, heating oil lost 1.57 cents to settle at US$2.2281 a gallon, and gasoline dropped 1.64 cents to settle at US$2.2983 a gallon.
In London, Brent crude gave up 78 cents to settle at US$84.81 on the ICE futures exchange.
Benchmark crude for May delivery fell 49 cents to settle at US$85.39 barrel on the New York Mercantile Exchange. Rising stocks helped pull up crude from a low of US$84.38 earlier in the day.
Stocks rose following news of solid bidding in the Treasury's 30-year bond auction. Reports of surprisingly strong March retail sales also helped buoy the market and offset earlier worries about Greece's lingering fiscal crisis.
Oil prices have recently tracked the performance of the stock market, particularly the S&P 500, as crude has become a major investment vehicle for financial companies.
"It's people who move money as opposed to people who move oil that determine what the price of oil will be," said Tom Kloza, chief oil analyst for Oil Price Information Service.
Kloza said that because financial companies have become major players in oil trading, "we're trading less on merits and more on perception of where the world economy is going."
It may be time for oil prices to take a breather after rising steadily in recent sessions.
Crude shot to an 18-month high above US$87 this week from US$69 in early February on optimism that oil demand would increase with a recovering global economy, although U.S. petroleum consumption remains weak.
"It appears that this energy rally may have about run its course," Ritterbusch and Associates said in a report. "We see absolutely nothing bullish about the oil fundamentals."
Meanwhile, the Energy Department reported on yesterday that natural gas inventories grew by 31 billion cubic feet, bringing the already bloated supply to about 1.67 trillion cubic feet for the week ended April 2.
Natural gas prices fell 11 cents to settle at US$3.909 per 1,000 cubic feet.
In other Nymex trading in May contracts, heating oil lost 1.57 cents to settle at US$2.2281 a gallon, and gasoline dropped 1.64 cents to settle at US$2.2983 a gallon.
In London, Brent crude gave up 78 cents to settle at US$84.81 on the ICE futures exchange.
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