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Oil falls below US$99 per barrel
Source: Agencies |
May 20, 2011, Friday
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OIL dropped yesterday after an international energy watchdog expressed "serious concern" about the negative effect of higher prices on the global economy.
Although oil is lower than it was two weeks ago, the International Energy Agency said it remains too high. The IEA said that even after falling about 10 percent since May 5, oil is still cutting into household and business incomes around the world. The agency warned that there's "urgent need" for additional supplies to be made available to refineries to produce more gasoline, which will help bring down pump prices.
Benchmark West Texas Intermediate crude for June delivery fell US$1.54 to US$98.56 per barrel in midday trading on the New York Mercantile Exchange. The June contract ends today, and most trading has already switched to the July contract, which lost US$1.61 at US$98.96 per barrel.
Lackluster economic news yesterday also pushed down crude. The Philadelphia Federal Reserve reported that its measure of manufacturing activity slumped to the lowest reading since October. And the National Association of Realtors said the housing market remains weak as fewer people purchased previously occupied homes in April.
On the positive side, the Labor Department reported that the number of people applying for unemployment benefits fell sharply for the second straight week.
"A little bit of concern" is creeping into oil markets, PFGBest analyst Phil Flynn said. "We're back to: 'Wait, maybe the economy isn't that great. Maybe we shouldn't be so hyped-up about demand'" possibly increasing later this year.
Meanwhile, retail gasoline prices continue to fall, losing another 2 cents yesterday to a national average of US$3.905 per gallon (less than a dollar a liter). A gallon (3.79 liters) of regular is 7 cents higher than a month ago and US$1.053 more than the same time last year.
Experts say gasoline should get cheaper toward the Memorial Day weekend and drop to an average of US$3.50 per gallon (3.79 liters) in June.
Natural gas inventories also grew more than expected last week. The Energy Information Administration said in its weekly report that U.S. supplies grew by 92 billion cubic feet (2.61 billion cubic meters) for the week ended May 13. They're still about 11 percent lower than last year's storage level.
Natural gas for June delivery lost 6 cents to US$4.205 per 1,000 cubic feet (28.32 cubic meters) on the Nymex.
In other Nymex trading for June contracts, heating oil fell 2 cents at US$2.8876 per gallon (3.79 liters) and gasoline futures were unchanged at US$2.9520 per gallon (3.79 liters).
In London, Brent crude lost 87 cents to US$111.43 per barrel on the ICE Futures exchange.
Although oil is lower than it was two weeks ago, the International Energy Agency said it remains too high. The IEA said that even after falling about 10 percent since May 5, oil is still cutting into household and business incomes around the world. The agency warned that there's "urgent need" for additional supplies to be made available to refineries to produce more gasoline, which will help bring down pump prices.
Benchmark West Texas Intermediate crude for June delivery fell US$1.54 to US$98.56 per barrel in midday trading on the New York Mercantile Exchange. The June contract ends today, and most trading has already switched to the July contract, which lost US$1.61 at US$98.96 per barrel.
Lackluster economic news yesterday also pushed down crude. The Philadelphia Federal Reserve reported that its measure of manufacturing activity slumped to the lowest reading since October. And the National Association of Realtors said the housing market remains weak as fewer people purchased previously occupied homes in April.
On the positive side, the Labor Department reported that the number of people applying for unemployment benefits fell sharply for the second straight week.
"A little bit of concern" is creeping into oil markets, PFGBest analyst Phil Flynn said. "We're back to: 'Wait, maybe the economy isn't that great. Maybe we shouldn't be so hyped-up about demand'" possibly increasing later this year.
Meanwhile, retail gasoline prices continue to fall, losing another 2 cents yesterday to a national average of US$3.905 per gallon (less than a dollar a liter). A gallon (3.79 liters) of regular is 7 cents higher than a month ago and US$1.053 more than the same time last year.
Experts say gasoline should get cheaper toward the Memorial Day weekend and drop to an average of US$3.50 per gallon (3.79 liters) in June.
Natural gas inventories also grew more than expected last week. The Energy Information Administration said in its weekly report that U.S. supplies grew by 92 billion cubic feet (2.61 billion cubic meters) for the week ended May 13. They're still about 11 percent lower than last year's storage level.
Natural gas for June delivery lost 6 cents to US$4.205 per 1,000 cubic feet (28.32 cubic meters) on the Nymex.
In other Nymex trading for June contracts, heating oil fell 2 cents at US$2.8876 per gallon (3.79 liters) and gasoline futures were unchanged at US$2.9520 per gallon (3.79 liters).
In London, Brent crude lost 87 cents to US$111.43 per barrel on the ICE Futures exchange.
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