Oil slid for a second day in New York, trading at the lowest level in four months, on speculation a weakening global economy and Greece’s debt crisis will lead to lower fuel demand. U.S. Oil fell as much as $1.04 a barrel to $91.97 on Monday, extending last week’s losses, according to Reuters.
Oil futures fell as much as 1.7% today, extending the biggest weekly decline since May 6, as European governments failed to agree on releasing a loan payout to spare Greece from default, Japan’s exports dropped in May more than forecast and investors bet a report tomorrow may show U.S. home sales shrank last month to the lowest this year, according to Bloomberg.
Oil traded for a second day below its 200-day moving average, a long-term support level.
The drop followed news that U.S. oil supplies rose to the highest level in 31 years for the month of May, as refineries processed less crude amid a decline in gasoline demand, according to the American Petroleum Institute.
Funds reduced bullish bets on commodity prices for the first time in four weeks as Greece’s debt crisis spurred speculation that global growth will decline, curbing demand for raw materials.
Analysts predict that the oil price will rise in the medium term, as supply and demand tighten in the second half of 2011.
