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Oil settles below US$72 as stock markets slide
Source: Agencies |
May 15, 2010, Saturday
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CRUDE futures tumbled with the stock market yesterday, as investors worried that European economies would slow down and hurt the global economic recovery.
Benchmark crude for June delivery lost US$2.79, almost 4 percent, to settle at US$71.61 a barrel on the New York Mercantile Exchange. That's down about 18 percent from an intraday high of US$87.15 a barrel on May 3, an 18-month peak. Yesterday's settlement price is the lowest since crude settled at US$71.19 on Feb. 5.
On Wall Street, the Dow Jones Industrial Average lost 162 points, or 1.5 percent, to close at 10,620. The Nasdaq and the S&P 500 were each off about 2 percent.
Analysts expect oil prices will fluctuate for months in a volatile market created by plentiful oil supplies, sluggish demand and European financial woes that have weakened the euro and strengthened the dollar. Oil, like most commodities, is priced in dollars. A stronger dollar makes crude more expensive for overseas traders holding other currencies.
The euro, which is used by 16 countries, slid to a 19-month low of US$1.2359 in midday trading in New York.
"We're going to see this type of (oil) price movement where we'll spend several months clawing our way up 10 or 15 dollars and then in two or three weeks, we'll give it all of it back again," analyst Jim Ritterbusch of Ritterbusch and Associates said yesterday.
The Energy Department said this week that crude supplies in the US rose by almost 2 million barrels and were well above the average range for this time of year.
"The specter of large crude oil inventories seems to be weighing on markets much more than before, and has been instrumental in pressuring prices," Edward Meir, senior commodity analyst at MF Global in New York stated.
The oil spill in the Gulf of Mexico gushing about 200,000 barrels a day has so far not affected oil prices, according to analysts. It has not interfered with tankers carrying imported crude to Gulf ports or those taking refined products from there to other parts of the country. There is concern though that the spill could eventually slow shipments if vessels must be scrubbed of oil before they reach port.
In other Nymex trading in June contracts, heating oil fell 7.13 cents to settle at US$2.0606 a gallon, and gasoline lost 6.43 cents to settle at US$2.1308 a gallon. Natural gas was down 2.7 cents to settle at US$4.312 per 1,000 cubic feet.
In London, June Brent crude lost US$2.93 to settle at US$77.18 on the ICE futures exchange.
Benchmark crude for June delivery lost US$2.79, almost 4 percent, to settle at US$71.61 a barrel on the New York Mercantile Exchange. That's down about 18 percent from an intraday high of US$87.15 a barrel on May 3, an 18-month peak. Yesterday's settlement price is the lowest since crude settled at US$71.19 on Feb. 5.
On Wall Street, the Dow Jones Industrial Average lost 162 points, or 1.5 percent, to close at 10,620. The Nasdaq and the S&P 500 were each off about 2 percent.
Analysts expect oil prices will fluctuate for months in a volatile market created by plentiful oil supplies, sluggish demand and European financial woes that have weakened the euro and strengthened the dollar. Oil, like most commodities, is priced in dollars. A stronger dollar makes crude more expensive for overseas traders holding other currencies.
The euro, which is used by 16 countries, slid to a 19-month low of US$1.2359 in midday trading in New York.
"We're going to see this type of (oil) price movement where we'll spend several months clawing our way up 10 or 15 dollars and then in two or three weeks, we'll give it all of it back again," analyst Jim Ritterbusch of Ritterbusch and Associates said yesterday.
The Energy Department said this week that crude supplies in the US rose by almost 2 million barrels and were well above the average range for this time of year.
"The specter of large crude oil inventories seems to be weighing on markets much more than before, and has been instrumental in pressuring prices," Edward Meir, senior commodity analyst at MF Global in New York stated.
The oil spill in the Gulf of Mexico gushing about 200,000 barrels a day has so far not affected oil prices, according to analysts. It has not interfered with tankers carrying imported crude to Gulf ports or those taking refined products from there to other parts of the country. There is concern though that the spill could eventually slow shipments if vessels must be scrubbed of oil before they reach port.
In other Nymex trading in June contracts, heating oil fell 7.13 cents to settle at US$2.0606 a gallon, and gasoline lost 6.43 cents to settle at US$2.1308 a gallon. Natural gas was down 2.7 cents to settle at US$4.312 per 1,000 cubic feet.
In London, June Brent crude lost US$2.93 to settle at US$77.18 on the ICE futures exchange.
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