US crude futures plunge $1.94/bbl on US economic growth worries

17 June 2011 20:49  [Source: ICIS news]

HOUSTON (ICIS)--NYMEX light sweet crude for July delivery on Friday settled at $93.01/bbl, down $1.94 on pre-weekend length liquidation in response to the International Monetary Fund trimming its forecast for US economic growth.

European debt worries also unsettled the market, driving a number of commodities down despite the fact that the dollar traded down against the euro and the stock market posted light gains.

A strong rally on Wednesday tracked the weekly supply statistics from the Energy Information Administration (EIA), which showed a much greater-than-forecast drawdown in crude inventories. The situation was eventually viewed as a selling opportunity, causing market investors to start to cash out.

An overnight attempt to stage an upside correction to recent steep losses was short lived, with the July contract topping out at $95.40/bbl before starting to slide.

Front-month crude then plunged to $91.84/bbl before the euro shifted higher against the dollar and a portion of the losses were recouped.

August ICE Brent still managed to outperform its American counterpart, bottoming out at $111.05 before settling at $113.21/bbl, down 81 cents.

By: Ignacio Sotolongo
+1 713 525 2653

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