TUESDAY, 17 AUGUST 2010 

 

Oil prices hovered below $76 a barrel yesterday, as expectations for fuel demand in the second half of the year were undermined by weaker economic figures from the world’s three biggest economies- the United States of America (U.S.), China and Japan.

 

By early afternoon in Europe, benchmark crude for September delivery was up 24 cents at $75.63 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the contract fell 35 cents to settle at $75.39 a barrel, its lowest level in a month.Oil has dropped from above $81 a barrel early last week amid resurgent investor fears that the world economy may not grow in the second half as much as expected.

 

Growth figures from Japan yesterday added to evidence that the global recovery is losing momentum. Gross domestic product expanded just 0.1 per cent in the second quarter from the previous quarter as consumer spending waned.

 

The U.S. Commerce Department reported on Friday that retail sales excluding autos and gasoline sales fell 0.1 per cent in July, continuing a weak trend. One of the biggest obstacles to a strong recovery in the U.S. is anemic consumer spending.Recent indicators from China, the world’s biggest energy consumer, also show growth is slowing, albeit from a breakneck pace as Beijing clamps down a credit splurge that has driven up real estate prices.

 

Analysts said that falling support from external factors, such as the dollar’s exchange rate and global stock markets, may finally turn investors’ attention back to the basics of supply and demand and push prices down to levels which reflect the status quo.“There is plenty of oil available right now, and oil market fundamentals are bearish,” said a report from U.S. energy consultancy Cameron Hanover.

 

“The question for (this) week is whether they will be allowed to further develop their theme of weakness through lower prices.”“A further sell-off from here would bring prices in closer alignment with the prevailing macro picture, namely one where growth practically the world over seems to be slowing,” said a report from the Frankfurt-based bank.

 

“However, the likelihood of a sharp collapse in crude oil prices to below $70 is unlikely given that we have yet to enter the most dangerous part of what is supposed to be a very busy hurricane season.”Severe weather can threaten oil installations in the Gulf of Mexico, which account for 30 per cent of U.S. domestic oil production.

 

In other Nymex trading in September contracts, heating oil rose 1.07 cents to $2.0063 a gallon, gasoline added 1.14 cents to $1.9510 a gallon and natural gas fell 0.8 cent to $4.320 per 1,000 cubic feet.In London, Brent crude was up 24 cents at $75.35 a barrel on the ICE Futures exchange.

 

Source:Guardian

TUESDAY, 17 AUGUST 2010 

 

Oil prices hovered below $76 a barrel yesterday, as expectations for fuel demand in the second half of the year were undermined by weaker economic figures from the world’s three biggest economies- the United States of America (U.S.), China and Japan.

 

By early afternoon in Europe, benchmark crude for September delivery was up 24 cents at $75.63 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the contract fell 35 cents to settle at $75.39 a barrel, its lowest level in a month.Oil has dropped from above $81 a barrel early last week amid resurgent investor fears that the world economy may not grow in the second half as much as expected.

 

Growth figures from Japan yesterday added to evidence that the global recovery is losing momentum. Gross domestic product expanded just 0.1 per cent in the second quarter from the previous quarter as consumer spending waned.

 

The U.S. Commerce Department reported on Friday that retail sales excluding autos and gasoline sales fell 0.1 per cent in July, continuing a weak trend. One of the biggest obstacles to a strong recovery in the U.S. is anemic consumer spending.Recent indicators from China, the world’s biggest energy consumer, also show growth is slowing, albeit from a breakneck pace as Beijing clamps down a credit splurge that has driven up real estate prices.

 

Analysts said that falling support from external factors, such as the dollar’s exchange rate and global stock markets, may finally turn investors’ attention back to the basics of supply and demand and push prices down to levels which reflect the status quo.“There is plenty of oil available right now, and oil market fundamentals are bearish,” said a report from U.S. energy consultancy Cameron Hanover.

 

“The question for (this) week is whether they will be allowed to further develop their theme of weakness through lower prices.”“A further sell-off from here would bring prices in closer alignment with the prevailing macro picture, namely one where growth practically the world over seems to be slowing,” said a report from the Frankfurt-based bank.

 

“However, the likelihood of a sharp collapse in crude oil prices to below $70 is unlikely given that we have yet to enter the most dangerous part of what is supposed to be a very busy hurricane season.”Severe weather can threaten oil installations in the Gulf of Mexico, which account for 30 per cent of U.S. domestic oil production.

 

In other Nymex trading in September contracts, heating oil rose 1.07 cents to $2.0063 a gallon, gasoline added 1.14 cents to $1.9510 a gallon and natural gas fell 0.8 cent to $4.320 per 1,000 cubic feet.In London, Brent crude was up 24 cents at $75.35 a barrel on the ICE Futures exchange.

 

Source:Guardian