Economic worries push crude below $64/bbl

06 July 2009 09:24  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude futures fell more than $1/bbl (€0.72/bbl) on Monday, driving prices back below $64/bbl as hopes of an early recovery in the global economy faded, market sources said.

At 08:07 GMT, August Brent on London’s ICE futures was trading at $63.94/bbl, down $1.67/bbl on last Friday’s close. Earlier, the North Sea benchmark fell to a session low of $63.88/bbl, up $1.73/bbl.

At the same time, August NYMEX light sweet crude futures were trading at $64.08/bbl, down $2.65/bbl on last Thursday’s close. There was no settlement for NYMEX crude last Friday due to the US Independence Day public holiday. Earlier, the contract fell to a session low of $63.99/bbl, up $2.74/bbl.

Crude prices dropped back to their lowest level since late May, while Asian equity markets also retreated. Japan’s Nikkei Index fell for the fourth straight day, down 1.38% which is the longest period of decline since late October.

The US dollar also strengthened against the Euro, making dollar denominated investments more expensive for traders.

The crude and equity markets were undermined by lingering doubts about the global economic outlook after recent down beat economic data from the US and Europe. 

Data released last week revealed that June jobless figures in the US rose to a 26 year high of 9.5%, while European unemployment hit a 10 year high. Official data also revealed that the UK economy shrank by 2.4% in the first quarter of 2009, the steepest such decline in more than 50 years.

($1 = €0.72)

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By: James Dennis
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