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Oil settles below US$80 as demand worries persist
Source: Agencies |
March 16, 2010, Tuesday
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Online Edition
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OIL prices settled below US$80 a barrel yesterday, dragged down by a stronger dollar and increasing investor concerns about energy demand.
Energy prices fell across the board, with benchmark crude contracts for April delivery sliding US$1.44 to settle at US$79.80 a barrel on the New York Mercantile Exchange. Earlier, crude dipped as low as US$79.16. It's been nearly two weeks since prices dropped below US$80.
MF Global analyst Mike Fitzpatrick said, "A great deal of skepticism is creeping into the market about the sustainability of a market recovery," which has fueled concerns that consumers will keep their cars parked and watch their energy use closely.
Adding downward pressure to demand, Fitzpatrick said energy markets have been hampered by a "slack demand season" as the heating season draws to a close and the summer driving season has not yet begun.
Even so, U.S. motorists face steeper pump prices. While many analysts predict a peak of US$3 per gallon, Fitzpatrick believes drivers could pay as much as US$3.25 a gallon.
Gasoline prices have risen 16.2 cents in the last month and are now 88.2 cents higher than levels of a year ago.
Meanwhile, investors will be eyeing this week's Federal Reserve meeting for signs of when policymakers may start raising interest rates.
Also on the schedule is OPEC's midweek meeting at its Vienna headquarters, although analysts have few expectations of market-moving news from the world's key oil exporters.
In other Nymex trading in April contracts, heating oil fell 3.64 cents to settle at US$2.0576 a gallon, and gasoline dropped 3.22 cents to settle at US$2.2228 a gallon. Natural gas slipped by 0.9 cent to close at US$4.391 per 1,000 cubic feet. It hit a new 52-week low of US$4.334 in earlier trading.
In London, Brent crude was down US$1.50 at US$77.89 on the ICE futures exchange.
Energy prices fell across the board, with benchmark crude contracts for April delivery sliding US$1.44 to settle at US$79.80 a barrel on the New York Mercantile Exchange. Earlier, crude dipped as low as US$79.16. It's been nearly two weeks since prices dropped below US$80.
MF Global analyst Mike Fitzpatrick said, "A great deal of skepticism is creeping into the market about the sustainability of a market recovery," which has fueled concerns that consumers will keep their cars parked and watch their energy use closely.
Adding downward pressure to demand, Fitzpatrick said energy markets have been hampered by a "slack demand season" as the heating season draws to a close and the summer driving season has not yet begun.
Even so, U.S. motorists face steeper pump prices. While many analysts predict a peak of US$3 per gallon, Fitzpatrick believes drivers could pay as much as US$3.25 a gallon.
Gasoline prices have risen 16.2 cents in the last month and are now 88.2 cents higher than levels of a year ago.
Meanwhile, investors will be eyeing this week's Federal Reserve meeting for signs of when policymakers may start raising interest rates.
Also on the schedule is OPEC's midweek meeting at its Vienna headquarters, although analysts have few expectations of market-moving news from the world's key oil exporters.
In other Nymex trading in April contracts, heating oil fell 3.64 cents to settle at US$2.0576 a gallon, and gasoline dropped 3.22 cents to settle at US$2.2228 a gallon. Natural gas slipped by 0.9 cent to close at US$4.391 per 1,000 cubic feet. It hit a new 52-week low of US$4.334 in earlier trading.
In London, Brent crude was down US$1.50 at US$77.89 on the ICE futures exchange.
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