Crude again falters on Friday

Prices drop by almost 5% for the week

Crude prices once again fell on Friday, 25 July, 2008 as investors continued to be worried about oil demand from US in the long run. The rebounding dollar also added further impact to the fall. With this, crude ended lower in the seven out of last nine sessions.

Crude-oil futures for light sweet crude for September delivery closed at $123.26/barrel (lower by 2.23/barrel or 1.8%) on the New York Mercantile Exchange. For the week, prices coughed up $6.5 (4.8%). It's now 16.3% lower than the $147.27 record high hit last on Thursday, 10 July, 2008.

Crude prices gained 38% in the second quarter of this year. It was the biggest quarterly increase in nine years. It ended June 2008 higher by 9.9%. Prices are 63% higher than a year ago. For the year, crude is up by 32% till date.

At the currency markets on Friday, the dollar got a lift from better-than-expected U.S. durable-goods data and lower crude-oil-futures prices. A Commerce Department report showed new orders for U.S.-made capital goods rose 0.8% in June, pushed higher by orders for primary metals, machinery and electrical equipment. The dollar index a measure of the greenback against a trade-weighted basket of currencies, was at 72.86, up from 72.860.

EIA’s weekly inventory report on Wednesday showed that an economic slowdown is taking toll on energy demand. Over the past four weeks, U.S. motor gasoline demand has averaged 9.3 million barrels per day, down by 2.4% from the same period last year.

Against this background, September reformulated gasoline fell 1.2% to $3.04 a gallon, and September heating oil dropped 1.3% to $3.55 a gallon. August natural-gas futures fell 2.6% to $9.08 per million British thermal units.