Commodities: Crude skids to eight month low

Date: Thursday 14 Jun 2012

Crude oil futures turned 0.8 per cent lower on Wednesday ahead of a key output meeting for the Organization of Petroleum Exporting Countries in Vienna.

Crude oil for July delivery fell 70 cents to settle at $82.62 a barrel on the New York Mercantile Exchange.

OPEC, which produces around a third of the world's oil supply, is widely expected to keep output levels the same at its meeting on Thursday. However ministers are becoming increasingly divided over how much crude to produce. Some oil ministers have voiced concern about oversupply and Saudi Arabia said it is keen to keep a lid on prices.

Crude was also pressured by lingering concern about weaker prospects for oil demand after weak US retail sales numbers and persistent nerves about the Eurozone. Retail sales contracted 0.4% month-on-month rate in May, confounding forecasts of no change.

Oil buyers were also kept at bay on news that Iran's foreign minister had described nuclear talks as optimistic.

The Energy Information Administration reported that crude supplies declined by 200,000 barrels for the week ended June 8. Gasoline stockpiles fell by 1.7m barrels and distillates, used in heating oil, declined 100,000 barrels.

Bullion rose for the fourth straight day on Wednesday as traders look to possible quantitative easing by the Federal Reserve. Very weak US retail sales data also fuelled safe haven demand.

Gold for August delivery climbed $5.60 to settle at $1,619.40 an ounce on the Comex division of the New York Stock Exchange.


CJ

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