Crude oil dropped 6.97 per cent on the U.S. growth concern

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{image-06-oil-barrel2(red).jpg www.goodreturns.in}On May 5, 2011 (Thursday), crude oil futures prices plunged in the domestic market due to following weak global cues. Oil for May contract declined as much as 6.97 per cent to Rs. 4,535.00 per barrel on the Multi Commodity Exchange (MCX).

Moreover, the price of June future contract, at the New York Mercantile Exchange (NYMEX), fell as much as 10.06 per cent to US$98.25 per barrel on the back of weaker US economic data, boosted the concern that demand for oil will be slowdown in the world"s largest oil consuming nation.

The oil prices weakened after the U.S. Labor Department reported yesterday that initial jobless claims increased by 45,000 to 474,000 in the week ended April 30, 2011 from the previous figure of 429,000.

A bearish economic data raised concern that demand for oil in the U.S., world"s largest consumer of crude oil, will be slowdown, and put a downward pressure on crude futures prices.

Moreover, the U.S. Energy Department reported this week that oil inventories climbed by 3.42 million barrels to 366.5 million barrels in the week ended April 29, 2011 against the forecasted figure of 2 million barrels.

While, the American Petroleum Institute (API) reported on Tuesday that the U.S. crude oil stockpiles rose by 3.2 million barrels to 364.2 million barrels in the week ended April 29, 2011.

At MCX, crude oil future for May contract closed at Rs. 4,577.00 per barrel, down by 6.11%, after opening at Rs. 4,869.00 against the previous closing price of Rs. 4,875.00. It touched the intra-day low of Rs. 4,535.00 with a business volume of 181,065 lots.

Crude oil for June future, at NYMEX, closed at US$99.80 per barrel, down by $9.44, after opening at US$108.78 against the previous closing price of US$109.24. It touched the intra-day low of US$98.25 with a business volume of 333,018 lots.

Oil prices continued to fall this week on lower than expected US economic data. The Automatic Data Processing, Inc. reported this week that employment number in the U.S. increased by 179,000 in April 2011, less than expected figure of 198,000, from a revised 207,000 in March 2011, reduced the optimism about economic growth in world"s largest oil consuming nation.

Moreover, the Institute for Supply Management (ISM) non-manufacturing index fell to 52.8 in April 2011, the lowest level since August 2010, from 57.3 in March 2011.

Read more about: crude, oil and gas, futures
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