NYMEX crude tumbles, correcting after record run

NEW YORK Mon Oct 1, 2007 5:48pm BST

NEW YORK Oct 1 (Reuters) - U.S. crude oil futures tumbled on Monday, extending Friday's end-of-quarter losses in what analysts called a technical correction after the recent record run-up and as November products futures also fell sharply.

"Although tight product supplies may temper the selling in crude oil, the market still appears to be technically overbought, so there should be follow-through selling this session, particularly if the dollar holds," John Kilduff, senior vice president at MF Global, wrote in a research note.

The waning threat of storm disruptions, after the most recent storm, Lorenzo, failed to hamper oil operations in Mexico, also was cited as a factor pressuring prices.

On the New York Mercantile Exchange at 12:36 p.m. EDT (1636 GMT), November crude CLX7 was down $1.79 or 2.19 percent at $79.87 per barrel, trading as low as $79.67, the lowest level since $78.44 on Sept. 26, and as high as $82.02.

Crude hit a NYMEX record high $83.90 on Sept. 20.

Support on Monday charted at $80.00 gave way early, with crude slumping below the $81.51 10-day moving average and just below the 20-day moving average at $79.71. Monday's early peak was 2 cents above resistance charted at $82.

In London, November Brent crude LCOX7 was down $1.97 or 2.49 percent at $77.20 a barrel, trading $76.59 to $79.54.

Refined products futures fell sharply. NYMEX November heating oil HOX7 was down 5.76 cents or 2.59 percent at $2.1680 per gallon, trading from $2.1633 to $2.2399. The November contract fell 2 percent on Friday.

November RBOB RBX7 was down 6.12 cents or 3.0 percent at $1.9799 a gallon, trading from $1.9750 to $2.0524.

The U.S. dollar lifted crude futures recently by attracting flows from investors looking for alternatives to the U.S. currency at record lows. Rising crude prices have shielded producers from losses on petrodollars used to buy crude oil.

The dollar rose slightly from record lows against the euro on Monday as investors cashed out bets against the U.S. currency ahead of a fresh batch of economic data and central bank meetings this week. [ID:nN01213955]

The dollar pared some gains after a measure of September U.S. manufacturing activity hit its lowest level since March, but the gauge's employment measure registered growth ahead of Friday's payrolls data that will be closely watched.

Qatar's oil minister, Abdullah al-Attiyah, told Reuters on Monday that more crude supply from the Organization of Petroleum Exporting Countries would do little to ease $80 oil as speculative investment flowing into the market from other assets was boosting the price. [ID:nL0146074]

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.