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Oil falls below US$77 as 3-week rally stalls
Source: Agencies |
June 18, 2010, Friday
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OIL prices dropped below US$77 a barrel yesterday as investors lost confidence in a three-week rally amid signs of weak crude demand in the U.S., the world's biggest energy consumer, and a modest, uneven economic recovery.
Benchmark crude for July delivery dropped 88 cents to settle at US$76.79 a barrel on the New York Mercantile Exchange.
Oil has jumped from US$64 on May 25 - after dropping from US$87 earlier last month - as fears eased that Europe's debt crisis will stall global economic growth.
Recent movements in oil prices got experts saying that traders are now looking less at the fundamental factors but are getting carried away by emotional trading.
"At US$77 a barrel, oil prices have proved robust in the face of mixed U.S. economic data and rather negative U.S. inventory data for prices overall. The current price trend shows that oil prices appear to have already decoupled themselves from the fundamentals again," Commerzbank said in a note in Europe.
Investors are still eyeing clues about U.S. oil demand in crude inventory data, which had shown signs of improving recently but unexpectedly rose last week, the Energy Department's Energy Information Administration said Wednesday.
Several economic reports yesterday provided more reminders that the U.S. economy isn't bouncing back quickly.
U.S. stocks fell after a surprise increase in new claims for jobless benefits and a weaker regional manufacturing report.
In other Nymex trading, heating oil added 3.73 cents to settle at US$2.1474 a gallon, and gasoline gained 1.88 cents at US$2.1640 a gallon. Prices for the July contract for natural gas rose 18.4 cents to settle at US$5.162 per 1,000 cubic feet.
Brent crude rose 54 cents to settle at US$78.68 a barrel on the ICE futures exchange.
Benchmark crude for July delivery dropped 88 cents to settle at US$76.79 a barrel on the New York Mercantile Exchange.
Oil has jumped from US$64 on May 25 - after dropping from US$87 earlier last month - as fears eased that Europe's debt crisis will stall global economic growth.
Recent movements in oil prices got experts saying that traders are now looking less at the fundamental factors but are getting carried away by emotional trading.
"At US$77 a barrel, oil prices have proved robust in the face of mixed U.S. economic data and rather negative U.S. inventory data for prices overall. The current price trend shows that oil prices appear to have already decoupled themselves from the fundamentals again," Commerzbank said in a note in Europe.
Investors are still eyeing clues about U.S. oil demand in crude inventory data, which had shown signs of improving recently but unexpectedly rose last week, the Energy Department's Energy Information Administration said Wednesday.
Several economic reports yesterday provided more reminders that the U.S. economy isn't bouncing back quickly.
U.S. stocks fell after a surprise increase in new claims for jobless benefits and a weaker regional manufacturing report.
In other Nymex trading, heating oil added 3.73 cents to settle at US$2.1474 a gallon, and gasoline gained 1.88 cents at US$2.1640 a gallon. Prices for the July contract for natural gas rose 18.4 cents to settle at US$5.162 per 1,000 cubic feet.
Brent crude rose 54 cents to settle at US$78.68 a barrel on the ICE futures exchange.
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