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Tuesday, September 18, 2012 5:56 pmMAKE MONEY $ BLO, New York: Crude oil prices dipped on Monday (Tuesday morning GMT), amid market speculation that the Obama administration will release strategic reserves to lower gas prices before the election November 6.
At the end of the trading session on the New York Mercantile Exchange (NYMEX), light sweet crude or West Texas Intermediate (WTI) for October delivery fell 4.35 dollars a barrel from Friday's close.
The benchmark contract settled WTI recovered to 2.38 dollars lower at 96.62 dollars per barrel.
In London trade, Brent North Sea crude for November delivery was down 3.23 U.S. dollars to close at 113.79 dollars, after falling as much as 11.50 U.S. dollars from the position Friday.
Analysts scramble to explain the dramatic decline Monday.
"The weakness in crude oil has been linked to a number of factors, including the rumored release of strategic oil reserves (which had been denied by the White House), along with chat 'fat-finger' trade potential 'fat-finger', in combination with light volume and pause rate Technically, "Briefing.com analysts said in a client note.
Market chatter about the strategic oil reserve arises because President Barack Obama faces tough competition for re-election from Republican rival, Mitt Romney, because of the sluggish economy at the top of voters' concerns.
"I think the SPR (strategic petroleum reserves) in the tongue of every person in the White House," said Rich Ilczyszyn, chief market strategist at iiTrader.com.
"Traders on the trading floor did not want to buy a crude oil price of 90 dollars in the U.S. because they are worried about the blow to outwit the SPR release would hit the price," he said.
But Tim Evans at Citi Futures take a broader view of the decrease in the price of a sudden.
"We think this is a 'profit-taking' the bull market being satisfied with small gains since the FOMC announcement on Thursday and the recent protests in the Middle East," said Evans.
Oil prices have surged on Friday to its highest level since early May, after the Federal Open Market Committee (FOMC) announced plans to boost economic growth in the country's largest crude oil consumer in the world. (Ant / RZY)source: www.metrotvnews.com
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