US crude futures plunge $5.20/bbl on lack of economic confidence

18 August 2011 20:55  [Source: ICIS news]

HOUSTON (ICIS)--NYMEX light sweet crude for September delivery settled at $82.38/bbl on Thursday, down $5.20 versus the previous close, in response to a series of disappointing economic data signalling contracting business activity.

Global stock markets plunged and the dollar rose as the European debt crisis and fears of a recession in the US caused investors to re-align their positions.

The feeding frenzy drove September crude down to bottom out at $81.86/bbl, down $5.72 during the normal floor session, before a portion of the gains were given back.
The bias remained to the downside and during post-settlement trading, the front month extended the losses to $81.15/bbl.

Crude prices had risen on Wednesday after the weekly supply statistics from the Energy Information Administration (EIA) showed a much greater–than–forecast drawdown in gasoline inventories, overshadowing a contrary to expectations build in crude stocks but the rally was short lived.

ICE Brent for October delivery was also quite weak but continued to outperform its American counterpart, falling to $106.27/bbl before settling at $106.99/bbl, down $3.61, widening the negative trans-Atlantic Brent-WTI arbitrage to over $24.00.

By: Ignacio Sotolongo
+1 713 525 2653

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