Friday, August 13, 2010

Crude Oil Trades Near Four Week Low After Retail Report Falls Short of Estimates

Crude oil fluctuated after sales at U.S. retailers rose less than forecast in July and the cost of living climbed for the first time in four months. Oil traded at its lowest level in four weeks as a lack of jobs prompted Americans to hold back on spending, according to figures from the Commerce Department. The increase in the consumer price index points to a stabilization that may ease concern that a slowdown in growth will spur deflation.

“The economic picture is unsettled,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The fundamentals are weak, with high inventories and weak demand, so the market has a hard time holding above $80.” Oil for September delivery fell 7 cents to $75.67 a barrel at 10:24 a.m. on the New York Mercantile Exchange. Earlier, it touched $75.32, the lowest price since July 16. Futures have fallen 6.2 percent this week, the most since the week ended July 2.

Retail sales increased 0.4 percent last month, following a revised 0.3 percent drop in June. Economists projected a 0.5 percent gain, according to the median estimate in a Bloomberg News survey. “The retail sales numbers were a little disappointing, which moved the market lower for a bit, but we’re holding on here,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc. in New York.

The consumer price index increased 0.3 percent, the most in a year and exceeding the 0.2 percent gain projected by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington.....Read the entire article.

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