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Oil ends at 5-month low on economy, inventories
Source: Agencies |
May 18, 2010, Tuesday
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Online Edition
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U.S. oil prices fell a fifth straight session and settled at a five-month low yesterday as the dollar surged against the euro and energy markets fretted over swollen U.S. oil inventories and signs that China's growth may have peaked.
"Concerns about deflation, the European Union and the euro are bringing down most commodities. And it brings back a focus
on fundamentals and supplies, which are high," said Phil Flynn, analyst at PFGBest Research in Chicago.
After U.S. oil futures hit a 19-month high at US$87.15 on May 3, mounting worries about Europe's debt problems and high oil
inventories pushed crude futures prices as low as US$69.27 on Monday, a 20.5 percent drop from that May 3 peak and their
weakest since Dec. 14, 2009.
U.S. crude for June delivery fell US$1.53, or 1.53 percent yesterday, to settle at US$70.08.
Trading volume was heavy ahead of the June contract's expiration on Thursday.
In London, July Brent crude fell US$2.83 to settle at US$75.10 a barrel.
The euro tumbled against the dollar for a fifth straight session, dropping to a four-year low on nagging fears euro zone austerity measures will cause a downturn in the region and curb global growth.
The dollar gained 0.6 percent against a basket of currencies.
A strong U.S. currency often pressures commodities by making dollar-denominated commodities, such as oil, more costly for holders of other currencies and by attracting investors out of commodities and into the foreign exchange market.
"Concerns about deflation, the European Union and the euro are bringing down most commodities. And it brings back a focus
on fundamentals and supplies, which are high," said Phil Flynn, analyst at PFGBest Research in Chicago.
After U.S. oil futures hit a 19-month high at US$87.15 on May 3, mounting worries about Europe's debt problems and high oil
inventories pushed crude futures prices as low as US$69.27 on Monday, a 20.5 percent drop from that May 3 peak and their
weakest since Dec. 14, 2009.
U.S. crude for June delivery fell US$1.53, or 1.53 percent yesterday, to settle at US$70.08.
Trading volume was heavy ahead of the June contract's expiration on Thursday.
In London, July Brent crude fell US$2.83 to settle at US$75.10 a barrel.
The euro tumbled against the dollar for a fifth straight session, dropping to a four-year low on nagging fears euro zone austerity measures will cause a downturn in the region and curb global growth.
The dollar gained 0.6 percent against a basket of currencies.
A strong U.S. currency often pressures commodities by making dollar-denominated commodities, such as oil, more costly for holders of other currencies and by attracting investors out of commodities and into the foreign exchange market.
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