Oil prices continue to fall, as survey forecasts rebound this week


MONDAY, 21 JUNE 2010


Crude oil futures fell for a second day to trade around $ a 76barrel in New York as the dollar strengthened and concerns persisted that fuel supplies in the U.S. are excessive.



Crude may advance next week after U.S. gasoline consumption climbed to the highest level in nine months, a Bloomberg News survey showed. The commodity lost 1.1 per cent after the Labour Department said the number of Americans seeking jobless benefits last week climbed to a one-month high. U.S. crude inventories are 8.4 per cent above their seasonal norm, according to the Energy Department.“The high and rising inventory levels reflect that the market is still in oversupply,” said Carsten Fritsch, an analyst with Commerzbank AG in Frankfurt. “Financial developments are more important than fundamentals right now in supporting the price.”



Oil for July delivery fell as much as $1.23, or 1.6 per cent, to $75.56 a barrel in electronic trading on the New York Mercantile Exchange, and traded for $75.85 at 1:10 p.m. London time. The contract is up 2.7 per cent this week. Brent crude for August settlement dropped $1.10 to $77.58 a barrel on the ICE Futures Europe exchange in London.The euro fell to $1.2374 from $1.2389. A stronger dollar decreases the investment appeal of commodities priced in the U.S. currency.



Global oil production may fall by 800,000 to 900,000 barrels a day if a moratorium on deepwater drilling spreads beyond the U.S., Executive Director of the International Energy Agency, Nobuo Tanakasaid today in the Japanese city of Fukui.Tighter regulations because of the BP Plc oil spill in the Gulf of Mexico may delay exploration projects, Tanaka said.Initial jobless applications in the U.S. increased by 12,000 to 472,000 in the week ended June 12. Economists surveyed by Bloomberg News projected 450,000 claims, according to the median forecast. The number of people receiving unemployment insurance rose, while those getting extended benefits dropped.



Oil may rise next week after U.S. demand climbed 1.6 per cent to 9.34 million barrels a day last week, a Bloomberg News survey showed. Eleven of 21 analysts, or 52 per cent, forecast crude will increase through June 25. Six respondents, or 29 per cent, predicted futures will be little changed and four said prices will decline. Last week, 42 per cent of analysts said the market would gain.



Crude oil may extend a two-week rebound in New York if prices can end this week above a Fibonacci level at $75.70 a barrel, according to technical analysis by Petromatrix GmbH.That corresponds to the half-way point in crude’s move this year from a peak of $87.15 a barrel on May 3 to a low of $64.24 on May 20.





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