February 2010
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Page added on February 5, 2010

Brent oil trading at $73 after biggest loss in 6 months

Brent oil prices had its biggest trading loss in six months yesterday as the US dollar climbed to the highest level against the euro since May 2009, Brent oil futures declined $3.84, or 5 percent, to $73.14 a barrel, the biggest drop since July 29th 2009. US Light crude oil futures for March delivery was at $73.46 a barrel, up 32 cents, in electronic trading on the NYMEX on Friday in Asia trading.

“The equities and energy markets heard reality calling,” said Mike Sander, an investment adviser at Seattle-based Sander Capital Advisors. “The euro-zone looks like a possible bust and unemployment is still really bad.”

European Central Bank President Jean-Claude Trichet said Yesterday that the economic outlook is subject to “uncertainty.” The euro has lost 4 percent this year against the dollar on concern Greece and other so-called peripheral nations will face increasing difficulty in curbing budget deficits that are in excess of European Union limits.

The US dollar traded at $1.3721 per euro at 3:15 p.m. Singapore time, from $1.3723 yesterday after touching $1.3669, the weakest level since May 20. A stronger greenback curbs the appeal of commodities as an alternate investment.

“The debt issue in Greece is for real and is not going away,” Sander said. “If a first-world country such as Greece defaults it could lead the way for others such as Portugal and Spain. As the euro falls, the dollar will strengthen.”

ConocoPhillips, the third largest US oil company, will consider shutting refineries that can’t cover their costs after the recession cut demand for transportation fuels, Clayton Reasor, vice president of corporate affairs, said at a Credit Suisse energy conference in Vail, Colorado, yesterday.