Oil drops below $68
Wednesday, 26 May 2010
LONDON, May 25 (Bloomberg): Crude oil declined before a report forecast to show UST supplies are growing, while concern Europe's debt crisis will spread prompted investors to sell riskier assets.
Oil dropped below $68 a barrel in New York and reached a five-month low in London as the euro weakened against the dollar, reducing the investment appeal of commodities. UST supplies of crude oil probably rose for the 16th time in 17 weeks because of surging imports, according to analysts surveyed by Bloomberg News before a government report tomorrow.
"It's the usual suspects," said Eugen Weinberg, analyst with Commerzbank AG in Frankfurt. "Higher risk aversion stemming from the Eurozone troubles as witnessed by falling equity markets and a stronger UST dollar."
Crude oil for July delivery fell as much as $2.90, or 4.1 per cent, to $67.31 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $67.80 at 11:42 a.m. London time. Brent crude oil for July settlement fell for a ninth day, by as much as $2.93, or 4.1 per cent, to $68.24. That's its lowest since Feb. 5.
Brent's premium over contracts in New York narrowed to 93 cents, the smallest since April 14.
The dollar strengthened to $1.2194 per euro from $1.2372 yesterday. The euro fell against all of its most-traded counterparts after the Bank of Spain said on May 22 it appointed a provisional administrator to run CajaSur, a savings bank crippled by property-loan defaults.
Futures rose yesterday on speculation that China may delay economic tightening measures and on signs that UST economic growth will accelerate. Europe's debt crisis has undermined that optimism, pushing the region's common currency lower.
Oil dropped below $68 a barrel in New York and reached a five-month low in London as the euro weakened against the dollar, reducing the investment appeal of commodities. UST supplies of crude oil probably rose for the 16th time in 17 weeks because of surging imports, according to analysts surveyed by Bloomberg News before a government report tomorrow.
"It's the usual suspects," said Eugen Weinberg, analyst with Commerzbank AG in Frankfurt. "Higher risk aversion stemming from the Eurozone troubles as witnessed by falling equity markets and a stronger UST dollar."
Crude oil for July delivery fell as much as $2.90, or 4.1 per cent, to $67.31 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $67.80 at 11:42 a.m. London time. Brent crude oil for July settlement fell for a ninth day, by as much as $2.93, or 4.1 per cent, to $68.24. That's its lowest since Feb. 5.
Brent's premium over contracts in New York narrowed to 93 cents, the smallest since April 14.
The dollar strengthened to $1.2194 per euro from $1.2372 yesterday. The euro fell against all of its most-traded counterparts after the Bank of Spain said on May 22 it appointed a provisional administrator to run CajaSur, a savings bank crippled by property-loan defaults.
Futures rose yesterday on speculation that China may delay economic tightening measures and on signs that UST economic growth will accelerate. Europe's debt crisis has undermined that optimism, pushing the region's common currency lower.