GEO BUSINESS NEWS

OIL PRICES BELOW 70 DOLLARS

NEW YORK: Oil prices sank from eight-month peaks Tuesday after new data signaled a plunge in consumer confidence in the United States, the world's largest energy consumer.

New York's main contract, light sweet crude for delivery in August, tumbled 1.60 dollars from Monday's closing price to 69.89 dollars per barrel, after earlier touching 73.38 -- a level unseen since October.
London's Brent North Sea crude for August delivery fell 1.69 dollars to 69.30 dollars a barrel, having earlier surged as high as 73.50.
Consumer confidence in the United States -- the world's biggest energy consuming nation -- sank in June as households worried about the prolonged recession and vanishing jobs, the Conference Board said Tuesday.
The news pushed the dollar higher against the euro on currency markets as investors flocked to buy the world's main safe-haven currency and moved away from risky currencies.
A stronger US currency makes dollar-priced oil more expensive for buyers holding weaker currencies, which in turn tends to dampen demand and pull the market lower. "The rising dollar affected the crude oil prices," said Mike Fitzpatrick of MF Global.
Oil prices have increased dramatically -- by 40 percent or more than 20 dollars -- in the second quarter on gaining confidence that the global slump is easing. It had closed at 49.66 dollars on March 31, which was the last day of the first quarter.
The Conference Board, a US business research group, said Tuesday its consumer confidence index retreated to 49.3 points in June from a revised 54.8 in May, an eight-month high. Most analysts expected a much stronger reading of 55.3 points.
This dashed hopes for a recovery soon from the recession that began in December 2007. "Once again we've seen the green shoots arguments shot down," said analyst David Fineberg at financial spread-betting firm CMC Markets in London.
"This shift in outlook is also hammering oil prices -- crude is back below 70 dollars a barrel -- so in summary, falling consumer demand is painting a rather bleak picture."

posted by RAJDULLARA @ 5:27 AM