RTTNews - Crude oil dropped below $60 per barrel after the latest International Energy Agency report backed lingering demand concerns. Crude capped its worst week since early January, falling more than 10%.
Light sweet crude for August delivery ended the day at $59.89 a barrel, down 52 cents on the session. Prices touched as low as $58.72 earlier in the session.
Oil dropped $6.84 per barrel this week, continuing a recent slide. Prices are down $10 in the month of July.
It was one year ago Saturday that oil capped a historic uptrend by reaching a record high of $147.27 per barrel. Oil is nearly $60 off that mark and had moved below $40 earlier this year.
On Friday morning, the International Energy Agency kept its 2009 crude oil forecast virtually unchanged from last month at 83.8 million barrels a day, down 2.5 million barrels per day from last year's levels. On an upbeat note, the agency also predicted demand will rise to 85.2 million barrels in 2010, up 1.4 million barrels.
Oil's hedge value was also lower amid mild strength for the U.S. dollar. The greenback rose above 1.400 against the euro and also saw mild strength against the British pound.
A disappointing consumer sentiment report from Reuters and the University of Michigan added to demand worries. The report released Friday morning showed that the preliminary reading on the consumer sentiment index for July came in at 64.6 compared the final reading of 70.8 for June. Economists had been expecting a more modest decrease to a reading of about 70.0.
In other economic news, a Labor Department report showed that import prices jumped 3.2 percent in June following a 1.4 percent increase in May. The increase was largely due to a 20.3 percent increase in the prices of petroleum imports, which rose 9.3 percent in the previous month.
A Commerce Department report showed that the trade deficit narrowed to $26.0 billion in May from a revised $28.8 billion in April. Economists had been expecting the deficit to widen to $30.0 billion from the $29.2 billion originally reported for the previous month.
Energy Department data released earlier in the week showed crude oil inventories decreased by 2.9 million barrels in the week ended July 3. Experts were expecting to see supplies dropped 3.2 million barrels. Gasoline inventories rose by 1.9 million barrels and distillate fuel inventories climbed by 3.7 million barrels.
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