US crude falls $1.86 on pre-expiration feeding frenzy

20 May 2010 20:39  [Source: ICIS news]

HOUSTON (ICIS news)--NYMEX light sweet crude for June delivery settled at $68.01/bbl on Thursday, down $1.86 versus Wednesday’s close, on the back of booksquaring ahead of the contract going off the board.

An aggressive round of length liquidation drove the expiring front month contract all the way down to $64.24/bbl, down $5.63 versus the previous close, but just as quickly market sentiment shifted and a good portion of the losses was recouped.

The market had come under selling pressure earlier when the dollar rallied against the euro and equities plunged on concerns regarding the eurozone debt and deflationary worries. But late in the day the euro shifted positive against the dollar, attracting buying across various commodities.

The July contract, about to become the spot month, performed much better than June, bottoming out at $68.85/bbl, down $3.63, before rebounding to settle at $70.80/bbl, down $1.68.

July ICE Brent was much less volatile, trading down to $70.20/bbl before settling at $71.84.bbl, down $1.85.

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By: Ignacio Sotolongo
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