praveen
02-05-2008, 07:07 AM
Oil prices declined on Thursday as the dollar rose and disrupted Nigerian supplies were expected to resume following a deal with unions to end a workers’ strike.
At the time to print, US crude fell for the third day, dropping by $2.53 to $110.95 a barrel. It fell to as low as $110.46, the lowest since April 14, after rising to $115.23 earlier. London’s Brent was $2.22 lower at $109.14.
On Wednesday US crude fell about $2 after the government data showed a large increase in crude oil inventories.
Gold hit a three-month low and metals also slid on the dollar’s gain.
“It is a large fund liquidation across all commodities,” a trader said.
The dollar rose to a one-month high against the euro and was heading toward a two-month high against the yen. The US currency recovered from earlier losses suffered after the Federal Reserve kept alive the possibility that interest rate cuts may continue.
Product futures were even marking larger percentage drops than crude futures due to signs of weakening consumer demand amid high retail prices.
ICE gas oil futures were leading the oil market lower, falling 2.9%. New York RBOB gasoline fell 2.6%.
“Demand destruction is definitely going on. I have got to believe that gasoline demand is coming under tremendous downward pressure. People are more reluctant to take longer drives,” said Nauman Barakat, senior vice president at Macquarie Futures USA.
In Nigeria, Exxon Mobil reached a deal with a Nigerian oil union on Thursday to end an eight-day-old strike which had shut in virtually all the US oil major’s production in the West African country, a union leader said. Exxon Mobil said in a statement it had started the process of resuming its Nigerian output.
Limited support came from a fall in Opec oil supplies. They dropped in April to their lowest this year as the Nigerian strike cut the country’s output and top Opec exporters Saudi Arabia and Iran trimmed production, an agency survey showed on Thursday.
At the time to print, US crude fell for the third day, dropping by $2.53 to $110.95 a barrel. It fell to as low as $110.46, the lowest since April 14, after rising to $115.23 earlier. London’s Brent was $2.22 lower at $109.14.
On Wednesday US crude fell about $2 after the government data showed a large increase in crude oil inventories.
Gold hit a three-month low and metals also slid on the dollar’s gain.
“It is a large fund liquidation across all commodities,” a trader said.
The dollar rose to a one-month high against the euro and was heading toward a two-month high against the yen. The US currency recovered from earlier losses suffered after the Federal Reserve kept alive the possibility that interest rate cuts may continue.
Product futures were even marking larger percentage drops than crude futures due to signs of weakening consumer demand amid high retail prices.
ICE gas oil futures were leading the oil market lower, falling 2.9%. New York RBOB gasoline fell 2.6%.
“Demand destruction is definitely going on. I have got to believe that gasoline demand is coming under tremendous downward pressure. People are more reluctant to take longer drives,” said Nauman Barakat, senior vice president at Macquarie Futures USA.
In Nigeria, Exxon Mobil reached a deal with a Nigerian oil union on Thursday to end an eight-day-old strike which had shut in virtually all the US oil major’s production in the West African country, a union leader said. Exxon Mobil said in a statement it had started the process of resuming its Nigerian output.
Limited support came from a fall in Opec oil supplies. They dropped in April to their lowest this year as the Nigerian strike cut the country’s output and top Opec exporters Saudi Arabia and Iran trimmed production, an agency survey showed on Thursday.