Oil falls nearly 4 percent on economic outlook, dollar
Monday, Jun 22, 2009 7:28PM UTC
NEW YORK (Reuters) - Oil prices fell nearly 4 percent to below $67 a barrel on Monday as the dollar firmed and concerns about the possibility of an economic rebound weighed on the market.
The World Bank said prospects for the global economy remained "unusually uncertain" as it cut 2009 growth forecasts for most economies, adding to concerns of a slower turnaround.
U.S. crude for July delivery, which expires on Monday, traded down $2.62 to settle at $66.93 a barrel. Brent crude lost $2.21 to settle at $66.98 a barrel.
"Crude and products futures fell for a second day on a bearish revision from the World Bank and on a stronger dollar," Addison Armstrong, an analyst at Tradition Energy in Stamford, Connecticut, said in a research note.
The U.S. dollar gained against the euro on worries over the euro zone's economic and fiscal outlook. A stronger dollar can limit the appeal of commodities to investors.
Further weakness came as economic concerns dragged down equities. Optimism over a potential economic rebound had lifted stocks in recent months and helped push crude up from $32.40 in December.
Some support came after Nigeria's main militant group said on Sunday it had attacked three oil installations belonging to Royal Dutch Shell, widening a month-old offensive against the OPEC nation's energy industry.
Data showed implied oil demand in China, the No. 2 consumer, rose 6 percent in May over a year earlier, its fastest growth since August 2008.
Surging demand in China and other emerging economies sent oil and other commodities on a six-year rally that peaked when crude topped $147 a barrel last July.
Iran's hard-line Revolutionary Guards threatened to crack down on street protests in the OPEC producer after opposition leader Mirhossein Mousavi called on supporters to stage more demonstrations over the disputed June 12 election.
A Reuters poll of analysts ahead of weekly U.S. inventory data forecast crude stocks in the world's top consumer fell by 1.3 million barrels last week on lower imports, while product stocks were seen rising.
The American Petroleum Institute will release its weekly stockpile data on Tuesday, while data from the U.S. Energy Information Administration comes out on Wednesday.
(Reporting by Matthew Robinson, Robert Gibbons and Gene Ramos in New York, Alex Lawler in London and Fayen Wong in Perth; Editing by Christian Wiessner)