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Crude tumbles on doubts about economic rebound

Oil plunges near $64 as weak economic data spreads doubt about a recovery

By Ernest Scheyder, AP Energy Writer
On Monday July 6, 2009, 3:31 pm EDT

NEW YORK (AP) -- Oil prices tumbled to a five-week low Monday on growing evidence of an extended recession that could sap energy demand for some time.

Related Quotes

Symbol	Price	Change
USO	34.71	-1.34

{"s" : "uso","k" : "c10,l10,p20,t10","o" : "","j" : ""}

Benchmark crude for August delivery fell $2.68 to settle at $64.05 a barrel on the New York Mercantile Exchange.

It was the fourth straight day of declines on Nymex and since hitting a midday high for the year last Tuesday. Crude prices have fallen nearly 13 percent since then.

Natural gas prices plunged as well.

Major natural gas users, like industrial manufacturers, have been hit hard by the recession and unemployment data released last week in both the U.S. and Europe doused hopes for a quick recovery.

The Labor Department reported Thursday, the final day of trading last week because of the July Fourth holiday, that U.S. economy lost a larger-than-expected 467,000 jobs in June. On the same day, a report from Europe indicated that in the 16 countries that use the euro spiked to a 10-year high in May.

"The recent evidence concerning the U.S. economy is terrible. The news regarding Europe seems no better," said economist Philip Verleger. "This suggests oil use will continue to decline for another year."

Oil prices had been rising for months on the belief that the economy would improve by the end of the year. Prices had also been pushed higher by the weak U.S. currency.

Because crude is bought and sold in dollars, it essentially becomes cheaper when the dollar falls. And the dollar has fallen steadily with the U.S. government spending billions to prop up major banks and the auto industry.

Doubts about how long the weak U.S. currency can sustain prices have begun to tamp down prices.

Even last week, when oil prices hit an eight-month high above $73 per barrel, it was another sign of how volatile the market has become. A barrel of oil fell midway through the day last Tuesday and prices have been declining since.

The soaring price of energy has baffled experts because demand for everything from crude to gasoline is dismal. The U.S. is mired in recession and Americans are driving billions fewer miles than they have in past years.

Retail gasoline prices rose every day for nearly two months as refiners slashed production. That streak finally ended two weeks ago and prices at the pump have fallen every day since.

Gasoline prices fell again overnight to a new national average of $2.611 a gallon, according to the Oil Price Information Service and AAA.

Prices for gasoline are likely to fall even further with the busiest driving weekends for the summer now over, said AAA spokesman Geoff Sundstrom.

"With the economy still limping along, we don't really see a reason for gasoline demand to increase," he said.

In other Nymex trading, gasoline for August delivery fell 5 cents to settle at $1.7404 a gallon and heating oil slid 7.5 cents to settle at $1.6266. Natural gas for August delivery shed 12.8 cents to settle at $3.487 per 1,000 cubic feet.

In London, Brent prices dropped $1.56 to settle at $64.05 a barrel on the ICE Futures exchange.

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07-Jul-2009 11:31

Others / AdvSCT

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x 0

Something is wrong then! Could it be one of the global financial crunch victim? As copper price plummeting perhaps.

1362945 ( Date: 07-Jul-2009 10:53) Posted:

Question of a newbie: It is almost 11 am and yet the opening prices of AdvSCT and UtdEnvirotech have not started. Still shown as dashes (--). WHY?

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07-Jul-2009 11:16

Others / What are you buying tomorrow?

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x 0

KXD accumulation at the most possible lowest price as many as possible lots too! Ha. ha.. ha... (CAVEAT EMPTOR)

taitai ( Date: 06-Jul-2009 15:53) Posted:

Hi guys/gorgeous

In times like this when STI is red, but still swinging sideways. Up not up, down not down. What you doing? Stay on the sidelines, accumulating (what stocks), yawning away.

Please share.

Smiley

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06-Jul-2009 14:56

Others / AdvSCT

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x 0

Avoid this stock not until the price drops to Sgd. 0.005 or on the year 2011, whichever comes first!

1362945 ( Date: 06-Jul-2009 10:03) Posted:

chiong and break the resistance price arh!

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06-Jul-2009 14:51

Others / B. of A. to pay $713 mln in TARP dividend

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x 0

Sooner or late, it will be sold. I suppose!

keepnosecrets ( Date: 06-Jul-2009 08:59) Posted:

Then I pray GIC sells off Citi.

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06-Jul-2009 14:47

Global Inv / price down on good news!

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x 0

So at what price level should I buy?

ru2bz4me ( Date: 05-Jul-2009 16:53) Posted:

This is my personal views for sharing.

As usual, with XD, price will tend to be traded down. Wth shortist, the price goes crazy. I think the next 2 to 3 days, the volume will be high with them covering their position.

I think the first price resistance will be 0.195 at EMA=20d or 0.20 at SMA=20d. The next resistance is 0.235 on the closed high on 26-Jun-09.

If the southern doji formed on 03-Jul-09 is ignored, a bullish engulfing or a bullish harami pattern may be formed tomorrow.

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06-Jul-2009 14:43

Others / DOW

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x 0

As long as it is not 2200 drop, it does not make any difference to Asian market or the rest of the world now. Ha. ha.. ha...

iPunter ( Date: 03-Jul-2009 04:22) Posted:

Nearing the close...

The Dow is now doing -220pts !!! ...

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06-Jul-2009 14:37

CharteredSC / 1 lot

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x 0

I wonder that is relevant?..............

niuyear ( Date: 30-Jun-2009 16:57) Posted:

Tan Tock Seng hospital's broadband not so good connection, therefore, he key in l lot, and have to wait a long time, to key in another lot...........hahaha, Swine flue has taken tolls on his health.

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06-Jul-2009 14:33

Insider Info/Tips / any counters to recommend

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x 0

It goes without saying........KXD.

woowoo ( Date: 04-Jun-2009 13:15) Posted:

What penny share is good now.

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06-Jul-2009 14:31

Others / US Meltdown Again

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x 0

I notice, you are a typical bearish talker. Ha. ha.. ha...

iPunter ( Date: 04-Jul-2009 13:43) Posted:

The time is perhaps ripe for the next leg of an 'unfinished' downward move, at a time when bullishness
reigns and the market has rebounded greatly with recent bailouts, and having since been fuelled by
widespread euphoric optismism of a fantastic recovery being underway...

Will the artificially propped-up economy, with complements of Uncle Sam, be on it's own feet again?
Perhaps it may learn to walk on it's own feet again...

But like a butterfly nymph assisted out of it's cocoon pod, it will be nice if it can last...
At least money could be made... Smiley

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06-Jul-2009 14:26

Others / Most - S-Chip get ready to get 10-20% Price Hike

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x 0

Okay I get it, that is why I keep buying all the under-performing shares, since those shares need buyer rather than seller, while over-performing counter do not need more buyer. It sounds radiculous but that the way it is to make money.

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06-Jul-2009 09:36

Others / Unit Trusts

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x 0

Yes. Yes, but it depends on the fund manager's management/performance of the individual fund management houses!

vthnay ( Date: 05-Jul-2009 14:39) Posted:

Hi All,

Does Unit Trusts form a part of your investment porfolio? Do you think Unit Trusts are good investments? Would like to hear your comments.

Cheers!

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06-Jul-2009 09:31

Others / Unit Trusts

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x 0

Just simply mis-guided information.

singaporegal ( Date: 05-Jul-2009 17:54) Posted:

The moment you buy UT you have already lost money because you need to pay management fees.

Most UTs have lost money in the past year and couldn't even out-perform the STI. Why pay someone else to lose money for you?

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03-Jul-2009 18:55

China Sports / China Sport

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x 0

Why? Is that not enough buying force to drive the price upward?

richtan ( Date: 03-Jul-2009 18:08) Posted:

Today, another failed attempt to close it at 0.145

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03-Jul-2009 18:05

China Intl / Worth watching stock for its huge growth in PRC.

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x 0

Holding so many lots about >5000 lots but it is not liquid and price stagnant. Any suggestion?

des_khor ( Date: 08-Jan-2008 10:47) Posted:

sudden eat up 1000 lots ! any news ?

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03-Jul-2009 17:58

Others / DOW & STI

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x 0

As your nick name "iPunter" implies, I shall not argue. Ha. ha.. ha...

iPunter ( Date: 03-Jul-2009 17:49) Posted:

'Long-term' and '5 years', etc are only easy to say... bit living through it is actually hell!...

Because when a person invests, he would definitely love it if his investments grow fast...the faster the better... this is human nature...

Thus, in reality, no one loves to be a long-term investor if he/she has the choice... hehehe... Smiley

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03-Jul-2009 17:41

Others / DOW & STI

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x 0

I am afraid, you are talking on the trader point of view! Just to take note: I am a mid to long term and hyper long term investor as my core investment strategy, while trading investment just for turbocharge of the investment performance to me.

iPunter ( Date: 03-Jul-2009 11:00) Posted:

Coupled or decoupled is immaterial...

As long as when it's time to buy you buy,

When it's time to short, you short...

Both directions are equally darlingly lucrative for buyers and sellers...

But holders will gain and lose, and gain and lose, and gain and lose ad infinitum... through the long years... Smiley

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03-Jul-2009 16:51

Others / B. of A. to pay $713 mln in TARP dividend

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x 0

Just a short term sweet bait for mid to long term fund raising purposes! (CAVEAT EMPTOR)

nickyng ( Date: 03-Jul-2009 16:42) Posted:

wow.....BOFA so fast make so much liao meh? can afford to pay 700m back to US govt? hmm...Temasek seems foolish to cut loss so fast hor? else will get some dividends or somethg rite? :P

SAN FRANCISCO (MarketWatch) -- Bank of America Corp. /quotes/comstock/13*!bac/quotes/nls/bac (BAC 12.64, -0.41, -3.14%) said Thursday its board approved about $713 million in dividend payments to the government under the Troubled Asset Relief Program. The dividend payment is related to $15 billion in government funds that Bank of America received from the Capital Purchase Program, which is part of TARP.

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03-Jul-2009 16:47

Others / B. of A. to pay $713 mln in TARP dividend

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x 0

Short term profit does not mean long term potential paper/realization gain!

nickyng ( Date: 03-Jul-2009 16:42) Posted:

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Crude tumbles on doubts about economic rebound

Oil plunges near $64 as weak economic data spreads doubt about a recovery

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