Oil falls to three-week low on Goldman concern, dollar strength
Tuesday, 20 April 2010
LONDON, April 19 (Bloomberg): Crude oil fell for a third day after the Securities and Exchange Commission sued Goldman Sachs Group Inc., while a stronger dollar damped the appeal of commodities for hedging inflation.
Oil declined as the disruption of European air traffic caused by Iceland's Eyjafjallajökull volcano entered a fifth day, limiting demand for jet fuel. Hedge-fund managers and other large speculators trimmed bets on rising oil prices for the first time in three weeks, US Commodity Futures Trading Commission data showed.
"The Goldman case may cause deterioration of short-term sentiment," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "With demand in developed economies still stagnating, there's a good chance oil will hit $80, depending on what happens with the equity market."
Crude oil for May delivery fell as much as $2.07, or 2.5 per cent, to $81.17 a barrel in electronic trading on the New York Mercantile Exchange. That's the lowest since March 29. It was at $81.24 at 10:29 a.m. London time. Brent crude oil for June settlement was down $1.95 at $84.04 a barrel on the London- based ICE Futures Europe exchange.
The May contract, which expires tomorrow, lost $2.27 on April 16 to $83.24 a barrel, the biggest drop since Feb. 5, after the SEC claimed Goldman Sachs misstated key facts about collateralized debt obligations tied to subprime mortgages. The more-widely held June futures in New York were down $1.94 at $82.73 today.
As many as 63,000 flights have been canceled after the April 14 eruption of Eyjafjallajökull spewed dust across Europe's airspace, causing airports from Dublin to Moscow to shutter. Jet fuel's premium to ICE gasoil futures declined to a two-week low of $41 a metric ton on April 16.
The euro fell to a one-week low against the dollar after European Union finance ministers told Greece to brace itself for the International Monetary Fund's conditions on a bailout package. The US currency was at $1.3436 per euro at 10:28 a.m. in London compared with $1.3503 in New York on April 16.
Oil declined as the disruption of European air traffic caused by Iceland's Eyjafjallajökull volcano entered a fifth day, limiting demand for jet fuel. Hedge-fund managers and other large speculators trimmed bets on rising oil prices for the first time in three weeks, US Commodity Futures Trading Commission data showed.
"The Goldman case may cause deterioration of short-term sentiment," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "With demand in developed economies still stagnating, there's a good chance oil will hit $80, depending on what happens with the equity market."
Crude oil for May delivery fell as much as $2.07, or 2.5 per cent, to $81.17 a barrel in electronic trading on the New York Mercantile Exchange. That's the lowest since March 29. It was at $81.24 at 10:29 a.m. London time. Brent crude oil for June settlement was down $1.95 at $84.04 a barrel on the London- based ICE Futures Europe exchange.
The May contract, which expires tomorrow, lost $2.27 on April 16 to $83.24 a barrel, the biggest drop since Feb. 5, after the SEC claimed Goldman Sachs misstated key facts about collateralized debt obligations tied to subprime mortgages. The more-widely held June futures in New York were down $1.94 at $82.73 today.
As many as 63,000 flights have been canceled after the April 14 eruption of Eyjafjallajökull spewed dust across Europe's airspace, causing airports from Dublin to Moscow to shutter. Jet fuel's premium to ICE gasoil futures declined to a two-week low of $41 a metric ton on April 16.
The euro fell to a one-week low against the dollar after European Union finance ministers told Greece to brace itself for the International Monetary Fund's conditions on a bailout package. The US currency was at $1.3436 per euro at 10:28 a.m. in London compared with $1.3503 in New York on April 16.