Demand concerns weigh on crude prices
Crude oil prices ended lower at Nymex on Tuesday, 01 June 2010.
Though prices had started the day lower, it inched up higher during the
course of the day but the rise was short lived and prices fell again.
Prices dropped due to demand concerns for energy across the globe.
On Tuesday, crude-oil futures for light sweet crude for July
delivery closed at $72.58/barrel (lower by $1.39 or 1.9%). Last week,
crude gained 5.6%.
For the month of May, crude shed 14%. It was the biggest monthly
drop for crude since December 2008. For the month of April, crude rose
2.8%. For the first quarter of this year, crude rose by 5.5%. Year to
date, crude is higher by 3.1%.
In the currency market on Tuesday, the euro shed almost 2%
against the dollar and fell to its lowest levels in more than four years
on concerns that the euro zone problems will slow down the overall
recovery of that region.
Among economic reports for the day, it was seen that activity in
U.S. manufacturing slowed a bit in May after hitting a six-year high in
April but still showed considerable momentum. The Institute for Supply
Management index fell to 59.7% in May from 60.4% in April. This was
above the 59% reading expected. Readings over 50% in the ISM diffusion
index indicate that more firms are growing than contracting. The ISM
tracks the breadth of growth across firms, asking purchasing managers if
business is better this month than last.
Separately, the Commerce Department in US showed that
construction spending increased 2.7% in April, the biggest gain in
nearly 10 years.
Fitch Ratings on last Friday downgraded Spain's debt to AA+ from
AAA, citing concerns about the country's level of debt relative to its
gross domestic product.
Among other energy products on Tuesday, reformulated gasoline
for July delivery lost 4 cents, or 2.2%, to settle at $1.98 a gallon on
Nymex.
Natural gas for July delivery declined 9 cents, or 2.1%, to
$4.24 per million British thermal units.
Crude ended FY 2009 higher by 78%, the highest yearly gain since
1999. It reached a high of $82 earlier in October 2009 and hit a low of
$33.98 on 12 February 2009. Crude prices had ended FY 2008 lower by
54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for June delivery closed higher by Rs 23
(0.66%) at Rs 3,487/barrel. Natural gas for June delivery closed at Rs
202.3, lower by Rs 1.5 (0.73%).
