Wednesday, May 19, 2010
Crude Oil Increases as the Euro Climbs From a Four Year Low
“Oil is reacting to the strong rally in the euro,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “There’s a fear that there will be further government intervention in the markets.” Crude oil for June delivery rose 49 cents, or 0.7 percent, to $69.90 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $67.90, the lowest intraday price since Sept. 30.
Brent crude oil for July settlement declined 88 cents, or 1.2 percent, to $73.55 a barrel on the London based ICE Futures Europe exchange. The contract reached $72.72, the lowest level since Feb. 16. German Chancellor Angela Merkel laid out proposals to gain control over “destructive” financial markets after she imposed a unilateral ban on naked short selling that sent stocks and the euro sliding.
Short sellers borrow assets and sell them, betting the price will fall and they’ll be able to buy them later, return them to the lender and pocket the difference. In naked short selling, traders never borrow the assets so betting is unlimited.....Read the entire article.
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