Crude continues to fall on Eurozone worries, US jobs, strong dollar

07 May 2012 08:43  [Source: ICIS news]

SINGAPORE (ICIS)--Crude futures declined on Monday with US crude futures briefly down more than $3/bbl earlier in the session amid renewed Eurozone worries, a stronger US dollar and lingering concerns over US jobs.

At 7:20 GMT, June Brent crude on London’s ICE futures exchange was trading at $112.46/bbl, down by 72 cents/bbl from the previous close. Earlier, the North Sea benchmark fell to a session low of $110.34bbl, down by $2.84/bbl.

June NYMEX light sweet crude futures (WTI) were trading at $97.35/bbl, down by $1.14/bbl on the previous close. Earlier, the US benchmark declined to a session low of $95.34/bbl, down by $3.15/bbl.

Crude oil is currently trading at levels last seen in early February 2012 prior to the impact of heightened Iran and Middle East supply concerns.

The US dollar strengthened further against the Euro and other leading currencies making dollar denominated commodities such as oil less attractive to international investors.

The US dollar rose amid a flight to safety triggered by escalating Eurozone worries following the election in France and Greece of anti-austerity politicians.

In France President Nicolas Sarkozy, who has been one of the leading proponents of austerity measures and bailouts of indebted nations, was defeated by his socialist rival Francois Hollande who has campaigned on reducing austerity measures and refocusing commitments to growth.

In debt-ridden Greece, the two pro-austerity governing coalition parties suffered defeats in Sunday’s national elections and were unable to gain a clear majority.

The Greek public angry with harsh economic measures and the EU-IMF bailout agreement voted in increased numbers for anti bailout parties such as the left wing coalition Syriza who wish to reject Greece’s bailout commitments.

Crude markets had already been negatively impacted by disappointing April US-non farm payroll data released last Friday.

The data revealed that the US economy had created fewer jobs than in the previous month and less than analysts had expected.

Nevertheless, unemployment was slightly down at 8.1% from 8.2% in March.

Asian equity markets also declined amid heightened Eurozone worries. The Nikkei 225 in Japan was down 2.78% to 9,119.14.   

By: James Dennis
+65 6780 4359

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