Oil prices slip on US growth worries
Monday, 14 June 2010
NEW YORK, June 13 (AFP): Oil prices retreated Friday after a plunge in US retail sales triggered fears about the pace of economic recovery in the world's largest energy consuming nation.
New York's main futures contract, light sweet crude for delivery in July, shed 1.70 dollars to 73.78 dollars a barrel. It briefly topped 76 dollars in intra-day trade on Thursday.
London's Brent North Sea crude for July dipped 94 cents to 74.35 dollars a barrel.
Investors were concerned by a US government report that retail sales in May plunged for the first time in eight months.
The fall triggered fears that consumer spending, a linchpin for US economic recovery, could weaken.
"The fact that the US is the best user of oil globally has the market concerned that demand might not jump as much," said analyst Bart Melek of BMO Capital Markets.
"This notion can clearly be seen in the retail sales" May US data.
Retail sales unexpectedly dipped 1.2 per cent to 362.5 billion dollars from April, according to data from the Commerce Department.
The monthly retail sales report is a primary indicator of consumer spending, which accounts for two-thirds of US output.
Most economists had expected a 0.2 per cent rise in retail sales in May following a revised 0.6 per cent gain the previous month.
Oil however enjoyed a good run this week.
Prices fell on Monday on concerns that weak employment would dampen US economic recovery and of a stronger dollar, which tends to dampen demand for the greenback-priced commodity because it becomes more expensive for buyers using weaker currencies. In turn, that pushes prices downwards.
Oil then rose on Wednesday as upbeat comments by Federal Reserve chief Ben Bernanke and declining US stockpiles bolstered hopes for economic recovery.
Fresh support came after US oil inventories fell 1.8 million barrels in the week ending June 4, more than double market expectations and suggesting US demand remained on track. On Thursday, oil continued higher, boosted by strong Chinese data and an upbeat energy demand outlook from the International Energy Agency.
New York's main futures contract, light sweet crude for delivery in July, shed 1.70 dollars to 73.78 dollars a barrel. It briefly topped 76 dollars in intra-day trade on Thursday.
London's Brent North Sea crude for July dipped 94 cents to 74.35 dollars a barrel.
Investors were concerned by a US government report that retail sales in May plunged for the first time in eight months.
The fall triggered fears that consumer spending, a linchpin for US economic recovery, could weaken.
"The fact that the US is the best user of oil globally has the market concerned that demand might not jump as much," said analyst Bart Melek of BMO Capital Markets.
"This notion can clearly be seen in the retail sales" May US data.
Retail sales unexpectedly dipped 1.2 per cent to 362.5 billion dollars from April, according to data from the Commerce Department.
The monthly retail sales report is a primary indicator of consumer spending, which accounts for two-thirds of US output.
Most economists had expected a 0.2 per cent rise in retail sales in May following a revised 0.6 per cent gain the previous month.
Oil however enjoyed a good run this week.
Prices fell on Monday on concerns that weak employment would dampen US economic recovery and of a stronger dollar, which tends to dampen demand for the greenback-priced commodity because it becomes more expensive for buyers using weaker currencies. In turn, that pushes prices downwards.
Oil then rose on Wednesday as upbeat comments by Federal Reserve chief Ben Bernanke and declining US stockpiles bolstered hopes for economic recovery.
Fresh support came after US oil inventories fell 1.8 million barrels in the week ending June 4, more than double market expectations and suggesting US demand remained on track. On Thursday, oil continued higher, boosted by strong Chinese data and an upbeat energy demand outlook from the International Energy Agency.