Friday, July 16, 2010

Crude Oil Falls for Third Day on Concern Slowing Economic Recovery to Cut Demand

Crude oil fell for a third day in New York on speculation that the U.S. economic recovery is slowing, reducing fuel demand in the world’s biggest energy consuming country. Oil slipped as much as 1.6 percent and equities tumbled after an index of preliminary consumer sentiment declined to the lowest level since 2009. Prices retreated yesterday as manufacturing in New York and Pennsylvania dropped, part of a nationwide decline in factory production of 0.4 percent in June.

“Oil should be a lot lower than it is,” said Peter Beutel, president of trading advisory company Cameron Hanover Inc. in New Canaan, Connecticut. “We’ve had some very bearish stuff come out about the economy this week.” Crude oil for August delivery slipped 42 cents, or 0.6 percent, to $76.20 a barrel at 10:57 a.m. on the New York Mercantile Exchange. Futures are little changed this week. Brent crude oil for September settlement fell 63 cents, or 0.8 percent, to $75.46 on the London based ICE Futures Europe exchange.

Oil in New York has traded in a range of $8.29 for the past month, from $71.09 to $79.38 a barrel. “We’re stuck in a $70 to $80 range and looking for a strong signal to exit it in either direction,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “It will take evidence that the recovery is gathering momentum to move us higher, and any signs pointing to continued sluggishness and weak demand will move us lower”.....Read the entire article.

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