WSJ:OIL FUTURES: Crude Futures Down on Greece Debt Concerns
By Cheang Chee Yew
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Crude-oil futures fell in Asia Friday, pressured by renewed concerns over the Greek sovereign debt situation, sparking concerns about a decline in global oil demand.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $94.36 a barrel at 0636 GMT, down $0.59 in the Globex electronic session. August Brent crude on London's ICE Futures exchange fell $0.51 to $113.51 a barrel.
"It's just a continuation of the [Greek debt] problem in Europe, which is nowhere near a solution," said Jonathan Barratt, Managing Director of Sydney-based Commodity Broking Services. He added that oil demand growth may stall as a result.
Oil prices may move lower in the near term tracking expectations of weak economic data, Jim Ritterbusch of Ritterbusch & Associates said in a note to investors. U.S. existing home sales numbers are due Tuesday and jobless claims Thursday.
"We still believe that negative economic numbers could place more downward pressure" on the market and expect "crude and products to ratchet lower during the coming week, with currency and equity markets driving oil prices for the most part."
Ritterbusch said he expects a "further downside slippage in July WTI toward the $92 area into Tuesday's expiration."
Meanwhile, the International Energy Agency said in a report Thursday that strong global oil demand prompted it to raise its five-year oil price forecast by $19 a barrel, but the report failed to support prices.
Crude prices aren't expected to break out from recent ranges in the second and third quarters unless there is a supply disruption in producers excluding Libya, BNP Paribas analyst Harry Tchilinguirian said in a note to investors.
But stronger demand in emerging markets, a weak dollar and lower inventories will likely boost crude-oil prices in the fourth quarter, Tchilinguirian said.
"As we head into the fourth quarter, oil inventories will have tightened as Libyan oil remains [mostly] off market and OPEC, at best, only partially replaces lost output. By then, a re-acceleration in growth in oil demand in emerging markets and dollar weakness will be key drivers in pushing average oil prices higher." But if Brent futures stay above $125 a barrel for too long, it would be detrimental to oil demand, he added.
Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 155 points to $2.9339 a gallon, while July heating oil traded at $3.0000, 38 points lower.
ICE gasoil for July changed hands at $945.75 a metric ton, down $3.00 from Thursday's settlement.
