AnMaster.com

Alexkid

Oil retreats to near $66 in midday European trade as stocks weaken, US economic reports eyed
By PABLO GORONDI
Associated Press Writer
07:08:39 AM (ET), Tuesday, September 29, 2009
Oil prices fell to near $66 a barrel Tuesday as European stock markets dropped slightly and investors awaited a slew of data on the U.S. economy.

By midday in Europe, benchmark crude for November deliver was down 48 cents at $66.36 in electronic trading on the New York Mercantile Exchange. The contract rose 82 cents Monday to settle at $66.84.

Regional stock markets, often a barometer of optimism about economic prospects, rebounded in Asia from a sharp fall Monday, but equities in Europe were mostly lower.

Supporting oil prices was the West's recent stern warning to Iran over a previously unknown nuclear facility. About 20 percent of the world's crude moves through the Straits of Hormuz on Iran's southern coast and any showdown between the West and Iran could threaten that route.

"Investors are still buying on dips around the mid-$60s level. Most people are reasonably confident that over the next 12 months oil is going to move higher," said Ben Westmore, energy analyst with National Australia Bank in Melbourne. "The gains in the U.S. equity markets also helped."

Westmore expects oil will average $80 a barrel in the third quarter of 2010.

"We're expecting a long recovering period, not a V-shaped recovery, but over 2010 we expect positive outcomes in the big developed economies, and oil demand will pick up," he said.

In the U.S., the most closely watched indicator this week will be the Labor Department's monthly jobs report on Friday. Reports also are due out on home prices, manufacturing, consumer confidence, construction spending and factory orders.

The market will be keeping a close eye on Wednesday's release of weekly U.S. inventory levels of crude oil and petroleum products. Stockpiles of crude, gasoline and heating oil have been growing, raising concerns about energy demand.

"Despite the rhetoric that oil is just a dollar trade, the price of crude was set last week by the (inventory) statistics and they should this week again be a key input," said Olivier Jakob of Petromatrix in Switzerland.

In other Nymex trading, gasoline for October delivery fell 0.92 cent to $1.6288 a gallon, and heating oil was down 0.39 cent at $1.6870 a gallon. Natural gas lost 1.3 cents to $4.817 per 1,000 cubic feet.

In London, Brent crude fell 53 cents to $65.01 the ICE Futures exchange.

___

Associated Press writer Alex Kennedy in Singapore contributed to this report.


--------------------------------------------------------------------------------
*
A no surprise for the end of September. *

__________________
Yeah...Do That.