Oil prices slip ahead of weekend

18th June 2010, Comments 0 comments

World oil prices fell on Friday, after a week of gains, as investors digested disappointing economic data in top energy consumer the United States, analysts said.

New York's main futures contract, light sweet crude for delivery in July, shed 67 cents to 76.12 dollars a barrel.

Brent North Sea crude for August delivery dipped 82 cents to 77.86 dollars a barrel in early afternoon deals.

Crude oil, which has soared in value this week, slid on Friday as some traders also opted to take profits.

"After the move we have had, it is not surprising people are putting money in the bank," said a broker from CMC Markets, cited by Dow Jones Newswires.

Prices have surged ahead this week on the back of global economic recovery hopes, the weak dollar and a surprise drop in US gasoline inventories that suggested strengthening energy demand.

"Crude pushed higher over the past week, gaining in line with other commodities amid improving risk sentiment and a pronounced correction in the dollar index," added VTB Capital analyst Andrey Kryuchenkov.

Oil had jumped on Monday as the dollar weakened after data showed an expansion of industrial production in the eurozone, which is battling a budget-deficit crisis.

The European Union reported that industrial production in the 16-nation eurozone grew by 0.8 percent in April from the March level and was up 9.5 percent on a 12-month basis.

The euro rose against the dollar on hopes that positive data means the eurozone debt crisis will not derail the global economic recovery.

A weaker dollar boosts demand for dollar-priced commodities as they become cheaper for buyers holding rival currencies.

The oil market also climbed on Tuesday, along with stock markets and the euro, as investors grew more confident about economic recovery.

On Wednesday, prices charged even higher after the US Department of Energy's revealed a surprise 600,000-barrel decline in gasoline reserves, confounding expectations of a flat reading.

Oil finished mixed on Thursday on the back of disappointing US economic data releases on unemployment and manufacturing.

The Philadelphia Federal Reserve's June index on manufacturing in the Mid-Atlantic region plunged eight points, to 13.4, its lowest level in nearly a year.

Manufacturing has been a key driver of the recovery that began about a year ago after a year of contraction.

New claims for jobless insurance benefits rose for the second straight week, the Labor Department reported, dashing expectations they would fall.


© 2010 AFP

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