Crude falls below $39 a barrel despite low US inventories
20 Feb 2009
Crude oil prices dropped to levels below $39 in the Asian trading on the New York Merchantile Exchange today despite a fall in stocks in the world's largest consuming country and lower OPEC production, as US demand fell and imports plummeted in January.
Light sweet crude for March delivery on the New York Mercantile Exchange fell 78 cents to 38.70 a barrel amidst weak investor and consumer demand. The contract is due to expire at the close of trade today.
North Sea Brent crude for April delivery was down 43 cents at $41.56 a barrel.
On Thursday, the benchmark New York contract rose almost $5 and Brent by over $5 a barrel after US Energy Information Administration (EIA) data showed US crude reserves fell 200,000 barrels in the week ending 13 February 13.
On the Multi Commodity Exchange of India (MCX), on the other hand, crude oil for March was trading at Rs1,973 per barrel down Rs13. Buyer support for the contract was seen at Rs1,875 and resistances at Rs2,000 levels.
Light, sweet crude for March delivery rose $4.86, or 14 per cent to $39.48 a barrel – the biggest one-day jump in more than 2 months. The April contract rose $2.24, or 6 per cent, to $39.64 a barrel.
US crude oil inventories shrank and imports fell by 859,000 barrels a day, for the first time this year, according to weekly data compiled by the US Energy Information Administration (EIA).
Crude prices often spike in sessions leading up to the expiration of a contract, as traders not wishing to take delivery of physical oil roll their investments over into the next contract.
