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Oil settles near US$84 as price slide continues
Source: Agencies |
April 14, 2010, Wednesday
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OIL fell for a fifth day yesterday to around US$84 a barrel on dim economic signals and warnings that higher crude oil prices may choke off the fragile economic recovery.
Benchmark crude for May delivery dropped 29 cents to settle at US$84.05 a barrel on the New York Mercantile Exchange.
Oil prices slid as the International Energy Agency warned that the recent two-month, 25 percent crude rally could jeopardize a recovery in the world's biggest economies if prices stay above US$80 per barrel.
"The economy is getting better, but if oil prices go up, it may end that story," said PFGBest analyst Phil Flynn.
Meanwhile, aluminum maker Alcoa Inc. kicked of earnings season on Monday with results that came up short of analysts' expectations, sending crude prices tumbling earlier in the session. Oil dipped as low as US$82.51 at one point. Although Alcoa thinks manufacturers will use more aluminum this year, many of its markets should still fall below historical norms.
Flynn said Alcoa's results "definitely played into bearish psychologies." Alcoa's performance reflects the health of the U.S. manufacturing industry, which is a major consumer of diesel fuel.
The last several days of sliding oil prices partly reverse the strong gains made last week when prices rose above US$87 a barrel.
Oil analyst Stephen Schork said oil trading in the second quarter mirrors trading at the start of the first quarter. "A lot off bullish investor enthusiasm, then, after a week that buying stops."
Meanwhile, analysts think the U.S. crude inventory supplies for the week ended April 9 will grow by another 1.6 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
MF Global analyst Mike Fitzpatrick said it is the longest stretch of inventory growth in five years. He said oil traders "are coming to two inescapable conclusions: the fundamentals do not support these price levels and whatever demand growth was going to be generated by this still-fragile recovery is now jeopardized by higher prices."
In other Nymex trading in May contracts, heating oil fell 0.47 cent to settle at US$2.2142 a gallon, and gasoline dipped 1.35 cents to settle at US$2.3093 a gallon. Natural gas rose 15.2 cents to settle at US$4.16 per 1,000 cubic feet.
In London, Brent crude was down 5 cents to settle at US$84.72 on the ICE futures exchange.
Benchmark crude for May delivery dropped 29 cents to settle at US$84.05 a barrel on the New York Mercantile Exchange.
Oil prices slid as the International Energy Agency warned that the recent two-month, 25 percent crude rally could jeopardize a recovery in the world's biggest economies if prices stay above US$80 per barrel.
"The economy is getting better, but if oil prices go up, it may end that story," said PFGBest analyst Phil Flynn.
Meanwhile, aluminum maker Alcoa Inc. kicked of earnings season on Monday with results that came up short of analysts' expectations, sending crude prices tumbling earlier in the session. Oil dipped as low as US$82.51 at one point. Although Alcoa thinks manufacturers will use more aluminum this year, many of its markets should still fall below historical norms.
Flynn said Alcoa's results "definitely played into bearish psychologies." Alcoa's performance reflects the health of the U.S. manufacturing industry, which is a major consumer of diesel fuel.
The last several days of sliding oil prices partly reverse the strong gains made last week when prices rose above US$87 a barrel.
Oil analyst Stephen Schork said oil trading in the second quarter mirrors trading at the start of the first quarter. "A lot off bullish investor enthusiasm, then, after a week that buying stops."
Meanwhile, analysts think the U.S. crude inventory supplies for the week ended April 9 will grow by another 1.6 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
MF Global analyst Mike Fitzpatrick said it is the longest stretch of inventory growth in five years. He said oil traders "are coming to two inescapable conclusions: the fundamentals do not support these price levels and whatever demand growth was going to be generated by this still-fragile recovery is now jeopardized by higher prices."
In other Nymex trading in May contracts, heating oil fell 0.47 cent to settle at US$2.2142 a gallon, and gasoline dipped 1.35 cents to settle at US$2.3093 a gallon. Natural gas rose 15.2 cents to settle at US$4.16 per 1,000 cubic feet.
In London, Brent crude was down 5 cents to settle at US$84.72 on the ICE futures exchange.
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