Crude oil futures - Weekly review: May 9-13
Investing.com
Published May 15, 2011 07:30AM ET
Investing.com – Last week saw crude oil futures drop close to a three-month low on Thursday amid concerns over a slowdown in global oil demand, before rebounding as fears over a disruption to U.S. supplies boosted prices.
On the New York Mercantile Exchange, light sweet crude futures for delivery in June settled at USD99.43 a barrel by close of trade on Friday, gaining 1.1% on the week.
Crude prices plunged nearly 4% on Wednesday as weaker-than-expected industrial output data from China sparked concerns that Chinese economic growth was slowing, triggering fears over a slowdown in demand for commodities.
Also Wednesday, official data showed that total U.S. crude oil inventories rose to the highest level since May 2009 last week, indicating a slowdown in demand from the world’s largest crude consumer.
Total U.S. fuel consumption declined 0.9% to 18.2 million barrels a day, the lowest level since June 2009, the report showed.
Crude prices extended losses on Thursday in volatile trade, falling to as low as USD95.24 a barrel after the International Energy Agency trimmed its forecast for 2011 global oil demand growth by 190,000 barrels to 89.2 million barrels per day, citing persistent high prices and weaker projections for advanced economies.
However, prices rebounded from the day’s low as the U.S. dollar declined against its major counterparts, boosting the appeal of commodities to investors.
Meanwhile, mounting concerns over the potential impact on U.S. supplies from Mississippi River flooding led to short covering ahead of the weekend, as some pipelines and terminals have already been shut down according to the Louisiana Oil & Gas Association.
JP Morgan said in a report on Friday that 13 refineries in the Gulf region have the potential to be impacted, as well as numerous petrochemical facilities and product terminals.
Over 2.6 million barrels per day of capacity could be affected, accounting for over 15% of the operable capacity in the U.S.
On Monday, crude prices jumped 4.5% amid bargain buying and after Goldman Sachs recommended buying crude, following the previous week’s 13.5% price drop.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery settled at USD113.33 a barrel by close of trade on Friday. The Brent contract jumped 3% on the week and was up USD11.87 on its U.S. counterpart.
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Written By: Investing.com
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