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Oil prices fall in volatile trading

Oil prices fall in volatile trading

Oil prices fell in volatile trading Tuesday not long after hitting an eight-month high.
Benchmark crude for August delivery dipped $1.60 to settle at $69.89 a barrel on the New York Mercantile Exchange after swinging between $69.03 and $73.38 in early trading.
It has been an extraordinarily volatile year, which began with crude prices near $40 per barrel, less than a third of what a barrel cost in July, before going on an extended rally for the past two months as the second quarter comes to a close.
"It's a lot of the same stuff," said Peter Beutel of Cameron Hanover, blaming huge investments by fund managers into the energy market. The influx of money has driven oil prices in the opposite direction of the dollar with major investors seeking a hedge against inflation.
"The market is not being allowed to express the supply and demand issues and that has been the problem on and off for the past two years," he said.
Oil closed 2008 at $44.60 after falling from $147 nearly a year ago. Crude then surged from below $35 in March in part on investor concern that massive U.S. fiscal stimulus spending will eventually spark high inflation. Investors often buy commodities such as crude as a hedge against a weakening dollar and inflation.
Beutel said he can see oil falling back to $55 a barrel during the next three months, maybe even lower.
Oil, which has tracked stock markets higher, also was hurt by a more than 100 point drop in the Dow Jones industrial average and a decline in consumer confidence.
Traders are anticipating that the Energy Information Administration on Wednesday will report that crude oil stock fell 2.2 million barrels for the week ended Friday, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Analysts also are looking for stock of gasoline, diesel and heating oil to rise and that the refinery utilization run to increase 0.4 percentage points to 87.5 percent.
In other Nymex trading, gasoline for July delivery fell 4.2 cents to $1.8937 a gallon and heating oil fell 6 cents to $1.724. Natural gas for July delivery fell 9 cents to $3.856 per 1,000 cubic feet.
In London, Brent prices tumbled $2.25 to $68.74 a barrel on the ICE Futures exchange. Earlier in the session, Brent peaked at $73.50.
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Associated Press writers Pablo Gorondi in Budapest, Hungary, and Alex Kennedy in Singapore contributed to this report.


Updated : 2021-05-06 21:43 GMT+08:00