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Crude Oil Falls

April 17, 2009

Crude Oil Falls, a Victim of Worries on Economy

NEW YORK — Crude-oil futures slipped Tuesday as new doubts about the U.S. economy emerged.

Light, sweet crude for May delivery settled 64 cents, or 1.3%, lower at $49.41 a barrel on the New York Mercantile Exchange, ending below $50 a barrel for the first time since April 8.

The Dung Quat oil refinery in Vietnam. Global oil demand is still seen falling 1.6% this year from 2008.

Oil prices were pulled lower by signs the U.S. economy is still weakening. Government reports for U.S. March retail sales and producer prices both came in worse than expected, ending a stretch where several indicators pointed to a bottoming out of the recession.

[Global oil demand is seen falling]That string of relatively positive data had presented a window for a broad rally that carried many commodities as well as U.S. equities higher starting in late February and early March. But Tuesday’s reports indicated the U.S. economy, a major driver for global oil demand, is still far from a recovery. Crude futures have bounced back from close to a five-year low hit in February, but lack the clear sign of an economic rebound that would carry prices well above $50 a barrel.

“This market really wants to go higher, and it’s just struggling,” said Mark Waggoner, president of Excel Futures in Newport Beach, Calif.

WSJ – 15 April 09

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