RTTNews - Crude oil finished lower on Friday, but recovered most of an early slump. Oil came under early pressure as OPEC lowered its demand forecast and moved off of a multi-month high.
Light sweet crude oil finished at $72.04, down 64 cents on the session. Oil hit as low as $70.80 in early trading.
In its monthly report, the Organization of Petroleum Exporting Countries said it expects oil demand to fall to 83.84 million barrels per day in the first quarter, a drop of 1.9% from a year ago. Last month, demand was expected at 84.47 million barrels a day.
Earlier this week, the International Energy Agency boosted its 2009 demand estimate to 83.3 million barrels per day, up 120,000 barrels. The Energy Information Administration boosted its expectations for the price of West Texas Intermediate crude oil to an average of $67 per barrel for the second half of 2009. This is up about $16 compared with the first half of the year.
Oil recovered some of its losses as the U.S. dollar gave back early gains against the euro and pound. Commodities often move opposite the dollar because of the hedge option.
Despite Friday's drop, oil finished up $1.64 on the week. The decline erased most of the gains seen last week, which came on the heels of May, when oil soared 30%.
In economic news, a Labor Department report that showed that import prices rose 1.3 percent in May following a revised 1.1 percent increase in April. Export prices rose 0.6 percent in May after edging up 0.4 percent in the previous month.
Later, the Reuters/University of Michigan consumer sentiment report showed a preliminary reading for June of 69.0 compared to a reading of 68.7 in May. Economists had been expecting a somewhat more notable increase to a reading of 69.5.
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