Crude oil falls back from $139
Crude oil fell in New York as traders viewed last week's $139-a-barrel record as excessive and an opportunity to sell contracts.
Oil's $11.33 gain on June 6, its biggest-ever in dollar terms, was described by Saudi Arabia's Oil Minister Ali al-Naimi as "unjustified", the Saudi Press Agency reported. Crude also declined after shipping documents indicated North Sea Brent exports will increase 8.6 percent next month.
"Crude moved outside its normal parameters last week, and now the market is dominated by people managing their positions," said Olivier Jakob, managing director of Petromatrix Gmbh in Zug, Switzerland. "Some traders will be forced to cover short positions, and others will decide the risk is too big so they just take profits."
Crude oil for July delivery dropped as much as $3.27, or 2.4 percent, to $135.27 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $136.61 at 1:45 pm in London.
The contract touched $139.12 on June 6, the highest since it began trading in 1983, after the US dollar fell to the lowest in almost two weeks and as Morgan Stanley said prices may reach $150 within a month.
Goldman Sachs Group Inc's commodities research head Jeff Currie said yesterday that $150 a barrel is possible this summer because of lower US stockpiles and falling supply.
Brent crude oil for July settlement declined as much as $3.64, or 2.6 percent, to $134.05 a barrel in trading on London's ICE Futures Europe exchange. It traded for $135.73 at 1:45 pm London time.
Tankers are set to load 175,097 barrels a day of Brent crude from the North Sea next month, up from 161,300 barrels a day scheduled for June, according to the loading schedule.
Brent's discount to the West Texas Intermediate crude used as a benchmark by New York traders widened to $1.29 after the release of the schedule, the most since May 19.
Agencies
(China Daily 06/10/2008 page17)
