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Oil struggling on financial concerns
Source: Agencies |
June 8, 2010, Tuesday
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OIL prices struggled yesterday amid worries the debt crisis in Europe could spread and clip the recovery in global fuels demand. Falling stock markets around the world and a stronger dollar were contributing factors.
Benchmark crude for July delivery lost 7 cents to settle at US$71.44 a barrel on the New York Mercantile Exchange. Crude lost US$3.10 a barrel on Friday to settle at US$71.51, after the U.S. government's jobs report showed companies remained reluctant to hire.
Weak employment data for May and comments from a Hungarian official saying his country could be hit by a Greece-like fiscal crisis have undermined confidence in global economic growth and oil demand.
"Investors are fleeing riskier assets so they're dumping stocks and oil," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. "The market may be overreacting a bit, but the jobs report shows that the U.S. economy is still struggling."
Some analysts point to falling U.S. crude inventories as a sign of improving crude demand and expect prices to rebound later this year.
"The shift in the market's view of forward fundamentals has been too extreme," Goldman Sachs said in a report. "We continue to expect crude oil prices to move into an US$85 to US$95 trading range in the second half."
In other Nymex trading in July contracts on yesterday, heating oil rose 1.06 cents to settle at US$1.9683 a gallon, and gasoline lost a fraction of a cent to settle nearly unchanged at US$1.9949 a gallon. Natural gas added 11.9 cents to settle at US$4.916 per 1,000 cubic feet.
Brent crude gained 3 cents to settle at US$72.12 a barrel on the ICE futures exchange.
Benchmark crude for July delivery lost 7 cents to settle at US$71.44 a barrel on the New York Mercantile Exchange. Crude lost US$3.10 a barrel on Friday to settle at US$71.51, after the U.S. government's jobs report showed companies remained reluctant to hire.
Weak employment data for May and comments from a Hungarian official saying his country could be hit by a Greece-like fiscal crisis have undermined confidence in global economic growth and oil demand.
"Investors are fleeing riskier assets so they're dumping stocks and oil," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. "The market may be overreacting a bit, but the jobs report shows that the U.S. economy is still struggling."
Some analysts point to falling U.S. crude inventories as a sign of improving crude demand and expect prices to rebound later this year.
"The shift in the market's view of forward fundamentals has been too extreme," Goldman Sachs said in a report. "We continue to expect crude oil prices to move into an US$85 to US$95 trading range in the second half."
In other Nymex trading in July contracts on yesterday, heating oil rose 1.06 cents to settle at US$1.9683 a gallon, and gasoline lost a fraction of a cent to settle nearly unchanged at US$1.9949 a gallon. Natural gas added 11.9 cents to settle at US$4.916 per 1,000 cubic feet.
Brent crude gained 3 cents to settle at US$72.12 a barrel on the ICE futures exchange.
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