Monday, August 30, 2010

Crude Oil Heads for First Monthly Slide Since May on Slowing Global Growth

Crude oil fell, headed for its first monthly decline since May, as slower than forecast growth in U.S. personal incomes stoked speculation the pace of economic recovery in the world’s largest crude user may falter. Futures dropped as much as 1.3 percent, extending their decline from the highest level in a week, after the Commerce Department said that incomes rose 0.2 percent, less than the 0.3 percent median estimate of 66 economists surveyed by Bloomberg News. An Energy Department report tomorrow may show crude inventories gained last week.

“The past couple of weeks have been clouded by talk of a double dip recession,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “Until we get some macro news that is more consistent, these markets are going to be a bit choppy.” The October contract fell as much as 94 cents to $73.76 a barrel in electronic trading on the New York Mercantile Exchange, and was at $73.82 at 1:43 p.m. Singapore time. Yesterday, it dropped 0.6 percent to $74.70.

Prices have tumbled 6.3 percent this month and are down 6.8 percent since the start of the year. Oil rose 2.3 percent last week, the biggest increase since the period ended July 23. “The roller coaster ride continues,” said David Taylor, a market analyst at CMC Markets Ltd. in Sydney. “Markets have become hyper-sensitive to economic developments”.....Read the entire article.

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