Crude oil futures prices

Crude oil futures prices settled below $70 a barrel for the first time since June 8 Friday in a selloff spurred by a steep drop in gasoline futures and weakness in the equities market.

Light, sweet crude for July delivery settled down $1.82, or 2.6%, at $69.55 a barrel on the New York Mercantile Exchange, hitting an intraday low of $68.90. The contract expires at Monday’s settlement. August crude, the incoming front-month contract, dropped $1.89 to settle at $70.02.

August Brent crude on the ICE settled down $1.87, or 2.6%, at $69.19 a barrel.

Gasoline futures sold off for a third straight day Friday, shedding 7% in the period, in continued profit-taking after prices on Wednesday settled at their highest levels since Oct. 3.

Front-month July RBOB gasoline futures on Friday settled down 10.51 cents, or 5.2%, at $1.9244 a gallon, the lowest price since June 3. Penny for penny, the decline was the biggest since March 30, while the percentage drop was the most in a single day since April 20.

“Gasoline started to pull the crude oil down. We are extremely overbought,” said Peter Beutel, president of Cameron Hanover.

“There was a lot of speculative activity today and a lot of long liquidation by the speculators with some of the funds being good sellers,” said Andy Lebow, senior vice president for energy at brokerage MF Global.

Traders have grown concerned about the potential for further gains in gasoline after an unexpected steep build of 3.4 million barrels in inventories in the week ended June 12 and the continued weak economy. Still, traders said the market could rebound ahead of the July 4 holiday weekend.

The gasoline crack spread – or the value of front-month gasoline futures compared with the cost of front-month crude – hit a four-month high near $16.50 a barrel Tuesday, spurring profit-taking. On Friday, the spread, or the theoretical profit margin for refiners, narrowed to $11.39 a barrel, the lowest since May 12.

Tony Rosado, a broker with GA Global Markets, said traders are now expecting the crack spread to hold near the $11.75-$12 a barrel level.

“I’ve been waiting for this sell off. Maybe this is the beginning of something bigger. I don’t see any reason for prices to be where we are now. They should be around $50 a barrel,” Beutel said.

Tags: Business, gas, News, oil, World

This entry was posted on Saturday, June 20th, 2009 at 10:08 pm and is filed under World. You can follow any responses to this entry through the RSS 2.0 feed.