OIL FUTURES: Crude Drops Further, Plagued By Bearish Economy

New York Times

SINGAPORE (Dow Jones)--Crude oil futures dropped amid thin trading in Asia Monday, still plagued by bearish sentiment resulting from earlier U.S. macroeconomic data.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at $64.29 a barrel at 0718 GMT, down $2.44 in the Globex electronic session.



During the intraday session, August Nymex crude fell to $64.19 a barrel before rebounding.

August Brent crude on London's ICE Futures exchange fell $1.47 to $64.14 a barrel.

Until the U.S. equities and currency markets open and offer new signals, oil prices will likely continue to be weighed down by earlier weak macroeconomic data, analysts said.

"With the bearish sentiment (seen earlier), it's not surprising to see the market is still under pressure in the Asia trading session," said Toby Hassall, a research analyst with Commodity Warrants Australia.

The Nymex crude futures dropped $3.51 a barrel, or 5.08%, last week, as the latest U.S. consumer and labor data showed that economy may be still mired in recession.

"There are some concerns that the market moved up too quickly (in the second quarter)...we may be looking down to $62 or $63 a barrel now," Hassall added.

Oil soared 40.7% in the second quarter, the biggest quarterly percentage gain since the quarter ended September 28, 1990 when Iraq invaded Kuwait.

But oil prices now are "dashed" by the bearish macroeconomic situation, said Ben Westmore, a commodities economist with National Australia Bank Ltd.

Nymex reformulated gasoline blendstock for August, the benchmark contract, fell 454 points to 174.54 cents a gallon, while heating oil traded at 165.27 cents, 489 points lower.

ICE gasoil for July changed hands at $520.25 a metric ton, down $9.00 from Friday's settlement.