Oil prices have pleased bears

Oil has fallen in price

In brief: Oil prices are falling so rapidly, that traders no longer believe in the possibility of speculation in the market of black gold.

Bidding oil contracts ended lower on Tuesday amid falling of quotations of optimism regarding the ability of admission to the EU rescue plan to stop the debt crisis, thereby reducing demand for fuel. In New York, by the end of trading on the NYMEX, the price of oil fell by 0.43 dollar (0.56%) to 76.37 dollar per barrel.

“It seems that a European rescue plan will support the optimism for a short time”, – said Addison Armstrong, director of market research from Tradition Energy. – “The crisis can be intractable and is likely to reduce oil consumption in Europe.” The leaders of 16 member countries of the European Union agreed the day before the allocation of 750 billion euros in assistance to countries in the block, facing the most problems with their financial systems. In 2008, the share of the European Union had 17% of world consumption of oil – according to BP Plc. At the news of agreement on the rescue plan the day before oil prices rose by 2,3%, while on the news with the debt crisis in the eurozone in the price of oil has lost 12% since May 3. “The U.S. dollar has surprisingly flexible” – says Peter Byutel, president of Cameron Hanover Inc. – “It seems that the dollar may soon repeat their highs of last week, that will affect the futures market.” In early trading, oil prices rose by 1.2% after the data for China showed a record growth in oil refining in the country in April at 17% against a background of strengthening domestic demand. Data from China can not be ignored “, – said Phil Flynn, vice president PFGBest. – “Although the end of the year and you can expect some slowdown in demand, now all spoke in favor of growth. OPEC clearly expects increased demand for oil from China. On the figures for China OPEC raised its forecast for growth of oil consumption in 2010 at 180.000 barrels (or 0.2%) to 85.38 million barrels a day.

“We have a lot of contradictory information on the economy. The reaction of the oil market in the European Union unveiled the plan was more cool than other markets. On the other hand, we have a positive on China “, – says John Kildaf, partner Round Earth Capital. The situation with oil rig in the Gulf of Mexico is seen by some analysts as a bullish factor for the oil market. Expected today a report on oil and oil products in the U.S. is likely to show growth of oil reserves at 1.75 million barrels last week to 360.6 million barrels, which can become the 14 th week of growth stocks over the past 15 weeks.

Ukrainian Globalist
2010-05-11 22:23, Economics.

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