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Crude oil drops on U.S. industrial production

Crude oil drops on U.S. industrial production

December 16, 2011 / 10:58 AM IST
Forexpros -
Forexpros - Crude oil futures dropped for the second day in a row on Thursday due to declining U.S. industrial production.

On the New York Mercantile Exchange, light sweet crude futures for January settlement traded at USD93.47 a barrel during late U.S. trade, giving back 1.61%.

It earlier hit a daily high of USD95.38 a barrel.

Weakness in the U.S. dollar did little to help the bearish crude price environment.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.37% to trade at 80.96. Dollar weakness normally helps commodity prices, as it increases their appeal as an alternative asset and makes dollar priced commodities less expensive for holders of other currencies.

Federal Reserve data indicated industrial production fell 0.2% in November weighing on oil prices.

Earlier in the session, oil prices climbed 1.1% on positive U.S. employment news, prior to falling back.

Michael Lynch of Strategic Energy & Economic Research explained today's bearishness to Bloomberg, "The U.S. is still the biggest oil consumer in the world and what happens here really matters."

Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery dropped 1.04% to trade at USD103.17 a barrel, up USD9.70 on its U.S. Counterpart.

This nearly USD10.00 spread has been narrowing recently, but is still historically high. The two contracts traditionally trade within USD1.00 of each other.





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first published: Dec 16, 2011 02:35 am

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