Thursday June 25, 2009
NEW YORK: Oil prices fell on Wednesday in choppy trading as the dollar strengthened and the United States reported mixed energy inventory data.
New York's main futures contract, light sweet crude for delivery in August, shed 57 cents from Tuesday's close to end at 68.67 dollars a barrel.
The price of London's Brent North Sea crude for August delivery fell 47 cents to 68.33 dollars per barrel.
Traders said prices were dictated by the dollar, which rose after the US Federal Reserve's policy-making body concluded a two day meeting with a consensus to maintain virtually zero interest rates to stimulate the world's largest economy from prolonged recession.
Around 1830 GMT, the euro fell 1.3938 dollars from 1.4078 dollars in late New York trading on Tuesday.
A strong US currency makes oil priced in dollars more expensive for holders of other currencies. The Federal Open Market Committee also said that "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
Analysts said the Fed was holding to its aggressive course to stimulate the recession-bound economy despite the growing notion of "green shoots."
The market also digested data from the US Department of Energy on Wednesday showing crude stockpiles dropping 3.8 million barrels in the week ending June 19, steeper than the 1.3 million barrels expected by most analysts.
Inventories of gasoline, or petrol, jumped by 3.9 million barrels compared to expectations of a climb totalling one million barrels.
"The numbers virtually cancel each other out," said Sucden analyst Robert Montefusco, pointing to the fact that in nominal terms the fall in crude inventories virtually matched the increase in gasoline stockpiles.
John Kiduff of MF Global said the market remain concerned about demand. "The outsize increase in gasoline inventories ahead of what used to be the high of the driving season is obviously weighing on the market," he said.
The market also remain gripped by post-election violence in key crude producer Iran.
Riot police blocked protesters from gathering in Tehran on Wednesday, witnesses said, as Iran's supreme leader warned he will not back down in the face of unrest following the disputed presidential vote.
"In the recent incidents concerning the election, I have been insisting on the implementation of the law and I will be (insisting). Neither the system, nor the people will back down under force," Ayatollah Ali Khamenei said.
It was the latest indication that the clerical regime will not brook dissent over the re-election of President Mahmoud Ahmadinejad despite a wave of public demonstrations and complaints that the June 12 election was rigged.
And in a sign security forces are wasting no time to put down protests, a large presence of riot police and Islamist Basij militiamen stopped a crowd of several hundred people trying to assemble outside the Iranian parliament building, according to a witness.
Analysts are concerned that a worsening of the crisis could cause the Iranian government to cut off oil supplies or block the Strait of Hormuz -- a vital passageway for oil tankers.
Crude oil futures plunged from record high points of more than 147 dollars in July 2008 to about 32 dollars in December as the economic downturn ravaged energy demand but the market has since clawed back ground on recovery hopes.
(AFP)
NEW YORK: Oil prices fell on Wednesday in choppy trading as the dollar strengthened and the United States reported mixed energy inventory data.
New York's main futures contract, light sweet crude for delivery in August, shed 57 cents from Tuesday's close to end at 68.67 dollars a barrel.
The price of London's Brent North Sea crude for August delivery fell 47 cents to 68.33 dollars per barrel.
Traders said prices were dictated by the dollar, which rose after the US Federal Reserve's policy-making body concluded a two day meeting with a consensus to maintain virtually zero interest rates to stimulate the world's largest economy from prolonged recession.
Around 1830 GMT, the euro fell 1.3938 dollars from 1.4078 dollars in late New York trading on Tuesday.
A strong US currency makes oil priced in dollars more expensive for holders of other currencies. The Federal Open Market Committee also said that "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
Analysts said the Fed was holding to its aggressive course to stimulate the recession-bound economy despite the growing notion of "green shoots."
The market also digested data from the US Department of Energy on Wednesday showing crude stockpiles dropping 3.8 million barrels in the week ending June 19, steeper than the 1.3 million barrels expected by most analysts.
Inventories of gasoline, or petrol, jumped by 3.9 million barrels compared to expectations of a climb totalling one million barrels.
"The numbers virtually cancel each other out," said Sucden analyst Robert Montefusco, pointing to the fact that in nominal terms the fall in crude inventories virtually matched the increase in gasoline stockpiles.
John Kiduff of MF Global said the market remain concerned about demand. "The outsize increase in gasoline inventories ahead of what used to be the high of the driving season is obviously weighing on the market," he said.
The market also remain gripped by post-election violence in key crude producer Iran.
Riot police blocked protesters from gathering in Tehran on Wednesday, witnesses said, as Iran's supreme leader warned he will not back down in the face of unrest following the disputed presidential vote.
"In the recent incidents concerning the election, I have been insisting on the implementation of the law and I will be (insisting). Neither the system, nor the people will back down under force," Ayatollah Ali Khamenei said.
It was the latest indication that the clerical regime will not brook dissent over the re-election of President Mahmoud Ahmadinejad despite a wave of public demonstrations and complaints that the June 12 election was rigged.
And in a sign security forces are wasting no time to put down protests, a large presence of riot police and Islamist Basij militiamen stopped a crowd of several hundred people trying to assemble outside the Iranian parliament building, according to a witness.
Analysts are concerned that a worsening of the crisis could cause the Iranian government to cut off oil supplies or block the Strait of Hormuz -- a vital passageway for oil tankers.
Crude oil futures plunged from record high points of more than 147 dollars in July 2008 to about 32 dollars in December as the economic downturn ravaged energy demand but the market has since clawed back ground on recovery hopes.
(AFP)
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