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Commodities: Crude hits fresh 2012 low

Date: Thursday 17 May 2012

Unease about Greece and rising inventory levels sent oil prices to a fresh 2012 low on Wednesday.

Greece's main political parties have been unable to agree on forming a coalition government and the country is now expected hold fresh polls in mid-June.

Meanwhile data from the Energy Information Administration showed an increase of 2.1m in crude inventories in the week ended May 11, a 22-year high. Analysts had expected an increase of 1.5m barrels.

Gasoline supplies fell 2.8m barrels while distillates, used in diesel and heating oil, fell by 1m barrels. Analysts had pencilled in a 480,000 barrel drop in gasoline supplies and distillates stockpiles were expected to rise by 120,000 barrels.

Crude oil for June delivery on the New York Mercantile Exchange had risen following the inventory report and good US economic data but later settled down $1.17 at $92.81 a barrel, the lowest since November 2011.

Crude prices have lost 13% in the last two weeks as investors liquidate positions on bearish signals such as Europe uncertainty, slowing US and China economies and rising inventories.

The stronger dollar also eroded appetite for oil as the greenback looked on track for its longest winning streak in 20 years as investors flock to its safe haven qualities.

Elsewhere bullion fell to a 10-month low on Wednesday as investors sought the safety of the US dollar.

Gold for June delivery declined $20.50 to $1,536.60 an ounce on the Comex division of the New York Mercantile Exchange.

Silver for July fell 88 cents to $27.20 an ounce and July copper dropped 4 cents to settle at $3.48 a pound.



CJ

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