Tuesday, May 18, 2010

Crude Oil Drops for a Seventh Day on Build in U.S. Gasoline Stocks and Europe Debt

Crude oil dropped for a seventh day in New York, its longest losing streak in five months, on concern that gasoline demand shows signs of slowing in the U.S. and as investors delayed buying commodities on speculation that the European debt crisis will worsen. Oil slumped to its weakest level in seven months after the euro touched a four year low earlier today as European nations struggle to meet austerity requirements. Crude prices also fell after an American Petroleum Institute report showed gasoline inventories in the world’s biggest energy consumer rose 981,000 barrels last week.

“Sometimes people are focusing a little too much on the good aspects of Asia, we need to remember that the north Atlantic economies are really important for oil,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in a Bloomberg Television interview from Melbourne. “And both the U.S. and Europe are very weak fundamentally.” Crude oil for June delivery dropped as much as $1.51, or 2.2 percent, to $67.90 a barrel in electronic trading on the New York Mercantile Exchange, the lowest intraday price since Sept. 30. It was at $68.72 at 11:48 a.m. in Singapore. Yesterday, the contract fell 67 cents to $69.41 a barrel, the lowest settlement since Sept. 29.

The U.S. Dollar traded at $1.2211 per euro at 11:50 a.m. Singapore time, from $1.2202 in New York yesterday. The euro fell yesterday after Germany said it will ban naked short selling and naked credit default swaps of euro area sovereign debt and the Bank of Italy allowed lenders to exclude losses on government bonds.....Read the entire article.

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