Thursday, July 2, 2009

(MY039) Oil slips to US$67

LONDON, July 2 — Swelling gasoline stocks and a much bigger than expected rise in US unemployment drove oil markets down more than a dollar today to US$67 (RM237) a barrel.

In the latest signal the economy of the world’s biggest energy consumer was still week, data on Thursday showed US employers had cut 467,000 jobs in June and the unemployment rate had risen to 9.5 per cent.

US crude fell US$2.02 to US$67.19 a barrel by 1300 GMT (9pm Malaysia). The contract settled 58 cents lower at US$69.31 yesterday.

London Brent crude dropped by US$1.78 to US$67.01.

“There’s a sense we’re breaking to the down-side because of weak economic data ... unemployment, house prices, lower stock markets,” said Christopher Bellew of Bache Commodities.

In addition he cited Wednesday’s US government inventory data that showed gasoline stockpiles in the United States rose by 2.3 million barrels last week.

Distillates, including diesel, also rose by 2.9 million barrels, although crude stocks dropped by 3.7 million barrels.

Traders viewed the increase in motor fuel ahead of the US July 4 Independence Day holiday — which traditionally marks the peak of the US summer driving season — as a symptom of continued demand weakness.

Some analysts are still relatively bullish, however, and say the Organisation of the Petroleum Exporting Countries has been very successful in stabilising the market.

Oil has rallied from a low of US$32.40 in December last year to highs above US$70 a barrel in June, although it is only around half last July’s record of more than US$147.

Over the second quarter of this year it gained around 40 per cent — the strongest quarterly gain since 1990.

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