Monday, May 24, 2010

Crude Oil Falls Below $70 on Concern European Debt Crisis Hasn't Run Its Course

Crude oil declined, falling below $70 a barrel in New York, after the seizure of a Spanish bank fueled concern Europe’s debt crisis may spread. Oil dropped for the first day in three as the euro weakened against the dollar, reducing the investment appeal of commodities. U.S. supplies of crude oil probably rose for the 16th time in 17 weeks amid ample imports, according to analysts surveyed by Bloomberg News before a government report tomorrow.

“Speculators are shifting money from risky to non-risky assets,” said Ken Hasegawa, a commodity derivatives sales manager at Newedge in Tokyo. “From a fundamental point of view, inventories are high so that could push prices further down but crude oil is really going to be driven by the euro issue.” Crude oil fell as much as $1.08, or 1.5 percent, to $69.13 a barrel in electronic trading on the New York Mercantile Exchange. It was at $69.16 at 12:08 p.m. Singapore time. Yesterday, the contract rose 17 cents, or 0.2 percent, to settle at $70.21 a barrel.

Futures rose yesterday on speculation that China may delay economic tightening measures and on signs that U.S. economic growth will accelerate. Europe’s debt crisis has undermined that optimism, pushing the region’s common currency lower. The dollar rose to $1.2299 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.....Read the entire article.

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1 comment:

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