Crude oil retreated from a seven-month high in New York on indications that Opec’s output is increasing and as traders who bet on rising prices sell futures to lock in gains.
Crude oil for July 2009 delivery dropped as much as $0.78, or 1.1%, to $67.80 a barrel on the New York Mercantile Exchange. It was traded at $68.42 a barrel at 12.07pm Singapore time. On 1 June, oil closed at $68.58 a barrel, the highest settlement since 4 November 2008. Prices are up 53% this year.
Crude oil increased as much as 3.6% on 1 June, capping a 12% raise since 21 May after the US and China reported increase in manufacturing activity. Opec increased its output by 1.5% in May.
Futures increased on 1 June on anticipation that fuel demand will rise as the economy improves later this year. The Institute for Supply Management’s US factory index strengthened to 42.8 from 40.1 in April and China’s Purchasing Manager’s Index showed manufacturing in May gained for a third month.
Opec’s oil production averaged 28.15 million barrels a day in May 2009, up 405,000 barrels a day from April 2009, as per the survey of oil companies, producers and analysts. The 11 Opec members with quotas, all except Iraq, produced 25.76 million barrels a day, 915,000 more than their target.
Brent crude for July 2009 settlement was unchanged at $67.97 a barrel on London’s ICE Futures Europe exchange at 11.50am Singapore time. Futures earlier dropped as much as $0.72, or 1.1%, to $67.25 a barrel.