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Oil tumbles below US$77 as hurricane fears ease
Source: Agencies |
June 30, 2010, Wednesday
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OIL prices tumbled below US$77 a barrel yesterday on signs Tropical Storm Alex would likely miss most of the rigs in the Gulf of Mexico, leaving supplies undisrupted, and as the dollar made strong gains against the euro.
By early afternoon in Europe, benchmark crude for August delivery was down US$1.54 to US$76.71 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 61 cents to settle at US$78.25 on Monday.
Alex gained strength and appeared on track to become a hurricane yesterday before it makes landfall very near the Mexico-U.S. border sometime late Wednesday, said the U.S. National Hurricane Center in Miami, Florida.
The tropical storm's center wasn't expected to approach BP's massive oil spill off Louisiana's coast or the other major crude installations in the area, the center said.
Crude prices jumped late last week on expectations Alex could disrupt Gulf oil supplies.
"On Friday, the storm was something of a blank canvas with nothing on it, and traders were quick to project their worst fears," Cameron Hanover said in a report. "But, by Monday, it was clear that this first storm of the 2010 Atlantic hurricane season was not going to be a major threat to the oil industry."
All major European and Asian stock markets fell yesterday, which also undermined overall investor confidence.
"It is possible that the energy market will receive further pressure in the near-term, following the general negative sentiment in the global equity markets as renewed concerns over the (euro zone's) sovereign debt problems continue to dominate the markets and put risk appetite off the board," said a report from analysts at Sucden Financial in London.
Also weighing on oil prices was the dollar's renewed strength against the euro and the British pound, making crude more expensive for investors holding those European currencies.
The euro fell to US$1.2192 in afternoon European trading from US$1.2287 late Monday in New York, while the British pound declined to US$1.5061 from US$1.5110.
In other Nymex trading in July contracts, heating oil fell 4.18 cents to US$2.0515 a gallon, gasoline dropped 4.16 cents to US$2.0960 a gallon and natural gas was down 0.7 cent at US$4.726 per 1,000 cubic feet.
In London, Brent crude was down US$1.47 to US$76.12 a barrel on the ICE Futures exchange.
By early afternoon in Europe, benchmark crude for August delivery was down US$1.54 to US$76.71 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 61 cents to settle at US$78.25 on Monday.
Alex gained strength and appeared on track to become a hurricane yesterday before it makes landfall very near the Mexico-U.S. border sometime late Wednesday, said the U.S. National Hurricane Center in Miami, Florida.
The tropical storm's center wasn't expected to approach BP's massive oil spill off Louisiana's coast or the other major crude installations in the area, the center said.
Crude prices jumped late last week on expectations Alex could disrupt Gulf oil supplies.
"On Friday, the storm was something of a blank canvas with nothing on it, and traders were quick to project their worst fears," Cameron Hanover said in a report. "But, by Monday, it was clear that this first storm of the 2010 Atlantic hurricane season was not going to be a major threat to the oil industry."
All major European and Asian stock markets fell yesterday, which also undermined overall investor confidence.
"It is possible that the energy market will receive further pressure in the near-term, following the general negative sentiment in the global equity markets as renewed concerns over the (euro zone's) sovereign debt problems continue to dominate the markets and put risk appetite off the board," said a report from analysts at Sucden Financial in London.
Also weighing on oil prices was the dollar's renewed strength against the euro and the British pound, making crude more expensive for investors holding those European currencies.
The euro fell to US$1.2192 in afternoon European trading from US$1.2287 late Monday in New York, while the British pound declined to US$1.5061 from US$1.5110.
In other Nymex trading in July contracts, heating oil fell 4.18 cents to US$2.0515 a gallon, gasoline dropped 4.16 cents to US$2.0960 a gallon and natural gas was down 0.7 cent at US$4.726 per 1,000 cubic feet.
In London, Brent crude was down US$1.47 to US$76.12 a barrel on the ICE Futures exchange.
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