Monday, October 22, 2012

Oil prices drop on renewed worries of a global economic revival – USO, UNG, SU, TOT, CVX, MRO

Oil prices fell on Friday on fresh concerns over a revival in the economy induced by weak corporate earnings and a drop in existing home sales and a rise in jobless claims in September.

Benchmark oil fell $2.05 to finish at $90.05 per barrel in New York. Brent crude, which is used to price international varieties of oil, dropped $2.28, or 2 percent, to end at $110.14 per barrel in London.

Among the major companiesthat delivered unexpectedly weak results were tech giants Microsoft, Google and hamburger chain McDonald's.

The National Association of Realtors also eleased data whichshowed that sales of previously occupied homes fell 1.7 percent in September from August in part because of fewer houses on the market.

Oil prices initially turned negative in early US trade following news that TransCanada Corp expected to restart the 590,000-barrel-per-day Keystone pipeline to the US market over the weekend despite poor weather hampering efforts.

The debt crisis in Europe and China's slow growth continued to be an overhang on sentiments and kpet prices down aalysts said.

Concerns about the lack of progress on a Spanish bailout dampened risk appetite, helping send equities and commodity markets lower and lending support to the dollar.

At the pump, retail gas prices fell 2 cents overnight to $3.715 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That's nearly 10 cents less than a week ago but 24 cents more than last year at this time.

Heating oil fell 5 cents to finish at $3.13 per gallon, wholesale gasoline fell 5 cents to finish at $2.70 per gallon, while natural gas rose 3 cents to finish at $3.62 per 1,000 cubic feet.

United States Oil Fund LP (ETF)(NYSEARCA:USO) slumped 2.14% to $33.34, while United States Natural Gas Fund, LP(NYSEARCA:UNG) was up 0.65%.

Suncor Energy Inc. (USA)(NYSE:SU) was down 1%, Chevron Corporation(NYSE:CVX) lost 1.11%, TOTAL S.A. (ADR)(NYSE:TOT) slid 1.15% and Marathon Oil Corporation(NYSE:MRO) declined over 2%.

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