Saturday, May 7, 2011

Oil prices drop after short recovery

Crude oil and other commodity prices were down again on Friday

Source: Press TV

Oil prices have retreated again in the New York Mercantile Exchange on demand worries after a slight rebound on a positive US jobs report.

The prices bounced up early in the Friday session, but they started to plunge again as the dollar rose to close the week down 15 percent in the sharpest decline in more than two years, Reuters reported.

West Texas Intermediate crude for June delivery fell $2.62 to $97.18 per barrel in New York, and Brent crude finished the day off $1.67 at $109.13 per barrel on the ICE Futures exchange in London.

The US crude ended down $16.75 for the week, the biggest weekly drop since the contract began trading in 1983.

Tom Bentz, director of BNP Paribas Commodity Futures in New York, said that cascading sell stops created a “domino effect,” noting, “It became a vacuum of less people trying to buy and more people trying to sell.”

Analysts say rising demand from emerging economies and concerns about further supply disruptions as a result of unrest in the oil exporters in North Africa and the Middle East put a floor under prices on Friday.

An index of the dollar compared with a basket of foreign currencies also rose two percent for the week.

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