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Crude Oil Falls For A Seventh Day In Longest Decline Since 2009

By on May 21, 2012

Oil dropped for a seventh day, the longest run of declines in more than two years, after Saudi Arabian crude output rose to close to a 31-year high and money managers reduced bullish bets on the commodity.

Futures slid as much as 0.7 percent after dropping for a third week in the period ended May 18.Saudi Arabia boosted daily output to 9.923 million barrels in March, the second- highest level since at least 1980 and more than Russia for the first time in six years, according to the Joint Organization Data Initiative. Funds reduced oil wagers to the lowest level since September 2010. Crude has slipped 13 percent this month amid concern that Europe’s debt crisis may worsen, curbing economic growth and fuel demand.

“The Saudis are saying there is plenty of oil,” Glen Ward, the Dubai-based business development manager at online commodities trading platform provider ICM Capital, said in a telephone interview yesterday. “I don’t see what will turn prices around.”

Crude for June delivery decreased as much as 64 cents to $90.84 a barrel in electronic trading on the New York Mercantile Exchange, and was at $91.13 at 9:23 a.m. Sydney time. It fell 1.2 percent on May 18 to $91.48, the lowest close since Oct. 26. The more-actively traded July contract slid 37 cents to $91.43. Front-month prices are 7.8 percent lower this year. The seven- day losing streak is the longest since December 2009.

Brent oil for July settlement was at $106.80 a barrel, down 34 cents, on the London-based ICE Futures Europe exchange. The front-month price for the European benchmark contract was at a premium to West Texas Intermediate of $15.33.