Oil Futures Decline to Lowest Level Since March
Source: MarketWatch, Kate Gibson and Claudia Assis (5/6/10)
"You have a two-headed monster attacking oil prices today."
Crude-oil futures for June delivery were off $1.13, or 1.4%, to $78.85 a barrel. Earlier, prices slid to an intraday low of $78.19, their lowest since late February.
Crude showed little reaction to a report that U.S. jobless claims fell 7,000 to a seasonally adjusted 444,000 last week.
"You have a two-headed monster attacking oil prices today," said Richard Ross, a technical analyst with Auerbach Grayson in New York.
The dollar makes oil more expensive for investors and buyers holding other currencies, and worries Europe and a potential sovereign debt crisis are threatening to halt the global recovery; with that, demand for oil, he said.
Oil has some technical support around $78–$79, Ross said. "We should see some rebound given the magnitude of the recent losses," he added.
Natural gas recouped some of its losses following a report on nat gas storage on Thursday. The EIA reported an increase of 83 billion cubic feet in the week ended April 30, the top of the range expected by most analysts.
Natural-gas futures for June delivery retreated 11 cents, or 2.9%, to $3.88 per million British thermal units, hovering around its lowest price in the last six months.
Crude oil also had to contend with successive higher-than-expected increases in inventories.
The Energy Information Administration on Wednesday said crude-oil inventories rose 2.8 million barrels in the week ended April 30, which included a 1.7 million increase in inventories in Cushing, Okla., the delivery point for Nymex oil.
Analysts surveyed by Platts had expected crude stocks to increase by 1.54 million.