By Ben Sharples
May 21 (Bloomberg) -- Crude oil was poised for a third weekly decline as European leaders struggled to contain the region’s debt crisis and reports cast doubts on the strength of the economic recovery in the U.S., the largest energy consumer.
Oil fell for the seventh time in eight days yesterday as French Finance Minister Christine Lagarde said countries that share the euro need greater coordination. The index of U.S. leading economic indicators unexpectedly fell in April, and the most Americans in a month filed applications for unemployment benefits. U.S. crude inventories rose for the 15th time in 16 weeks in the seven days ended May 14.
“The contagion effect across Europe is very real,” said Peter McGuire, managing director at CWA Global Markets Pty in Sydney. “There is just so much uncertainty in the market. Oil was probably overpriced in the high 80s and I think it’s probably got a little more to the downside.”
Crude oil for July delivery fell as much as $1.49, or 2.1 percent, to $69.31 a barrel, in electronic trading on the New York Mercantile Exchange, and was at $70.16 at 10:17 a.m. Singapore time. Futures are set for a 2 percent drop this week.
Yesterday, the June contract declined $1.86, or 2.7 percent, to $68.01, the lowest settlement since Sept. 29. June futures expired at the close of floor trading.
The 0.1 percent decrease in the index of U.S. leading economic indicators signaled that the economic expansion may slow in the second half of 2010. It was the first drop in a year for the New York-based Conference Board’s measure of the outlook for three to six months. It followed a revised 1.3 percent gain in March.
OPEC Shipments
The Organization of Petroleum Exporting Countries will ship 23.53 million barrels a day in the four weeks to June 5, compared with 23.25 million a day in the month to May 8, the Halifax, England-based tanker-tracker Oil Movements said yesterday. That’s the first reported increase in five weeks. The data exclude Ecuador and Angola.
Brent crude oil for July settlement dropped as much as $1.28, or 1.8 percent, to $70.56 a barrel on the London-based ICE Futures Europe exchange, and was at $71.03 at 9:56 a.m. Singapore time. Yesterday the contract declined $1.85, or 2.5 percent, to $71.84.
--Editors: Jane Lee, John Viljoen.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Jane Lee at jalee@bloomberg.net
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