Crude-oil futures turned lower in volatile trading Monday, as prices gained some support from a weaker dollar but fell after news the U.S. manufacturing sector expanded at a slower pace.
Oil had started the session lower as some traders judged that the death of Osama bin Laden after a U.S. raid in Pakistan would skim some of the risk premium off oil prices. It turned higher as the dollar traded at its lowest for the day.
Crude for June delivery CLM11 -0.48% declined 33 cents, or 0.3%, to $113.61 a barrel on the New York Mercantile Exchange. Oil on Friday settled at its highest level since September 2008.
It has been a roller-coaster session for Brent crude as well. The European benchmark for June delivery turned lower, losing 49 cents, or 0.4%, to $125.38 on ICE Futures in London.
The death of bin Laden had created “expectation that the risk of terror will decline and the risk premium on the price of oil could also drop as a result,” analysts at Commerzbank said in a note to clients Monday.
The reported death of one of Libyan leader Col. Moammar Gadhafi’s sons in a NATO air strike over the weekend has boosted hopes of a swifter end to the fighting in Libya and normalization of oil production sooner, the analysts said.
“We do not believe these hopes are realistic, though, and the fall in price should be short-lived,” they added.
Commodity prices had also dropped as the U.S. dollar had advanced after the news.
At last check, however, the dollar index DXY +0.04% , which measures the greenback against a basket of six major currencies, moved lower, to stand at 72.860 from 72.960 in late North American action on Friday. It came off its lows hit earlier in the session, however.
Other energy products also gyrated. Gasoline for June delivery RBM11 -1.62% retreated 3 cents, or 0.9%, to $3.36 a gallon. June heating oil HOM11 -0.78% declined 1 cent to $3.26 a gallon.
Traders also had to contend with news the U.S. manufacturing expanded at a slower pace in April. The sector posted its 21st consecutive month of expansion last month but the ISM index dipped to 60.4% from 61.2% in March, the Institute of Supply Management said Monday. Read more about U.S. manufacturing cooling off.
Analysts at Houston-based energy research firm Tudor Pickering Holt said the “first reaction by the market is relief” that the man who directed the Sept. 11, 2001, terror attacks that killed thousands, mostly at the site of the former World Trade Center, was dead. See more on U.S. raid in Pakistan in which bin Laden died.
While bin Laden’s al Qaeda organization “still exists and future strikes remain a risk … reality is al Qaeda has not focused on oil supply/transportation targets over the past decade, so [we] don’t think bin Laden’s death should have significant impact on crude (up or down),” the Houston-based energy research firm said in a comment to clients.
Oil had started the session lower as some traders judged that the death of Osama bin Laden after a U.S. raid in Pakistan would skim some of the risk premium off oil prices. It turned higher as the dollar traded at its lowest for the day.
Crude for June delivery CLM11 -0.48% declined 33 cents, or 0.3%, to $113.61 a barrel on the New York Mercantile Exchange. Oil on Friday settled at its highest level since September 2008.
It has been a roller-coaster session for Brent crude as well. The European benchmark for June delivery turned lower, losing 49 cents, or 0.4%, to $125.38 on ICE Futures in London.
The death of bin Laden had created “expectation that the risk of terror will decline and the risk premium on the price of oil could also drop as a result,” analysts at Commerzbank said in a note to clients Monday.
The reported death of one of Libyan leader Col. Moammar Gadhafi’s sons in a NATO air strike over the weekend has boosted hopes of a swifter end to the fighting in Libya and normalization of oil production sooner, the analysts said.
Commodity prices had also dropped as the U.S. dollar had advanced after the news.
At last check, however, the dollar index DXY +0.04% , which measures the greenback against a basket of six major currencies, moved lower, to stand at 72.860 from 72.960 in late North American action on Friday. It came off its lows hit earlier in the session, however.
Other energy products also gyrated. Gasoline for June delivery RBM11 -1.62% retreated 3 cents, or 0.9%, to $3.36 a gallon. June heating oil HOM11 -0.78% declined 1 cent to $3.26 a gallon.
Traders also had to contend with news the U.S. manufacturing expanded at a slower pace in April. The sector posted its 21st consecutive month of expansion last month but the ISM index dipped to 60.4% from 61.2% in March, the Institute of Supply Management said Monday. Read more about U.S. manufacturing cooling off.
Analysts at Houston-based energy research firm Tudor Pickering Holt said the “first reaction by the market is relief” that the man who directed the Sept. 11, 2001, terror attacks that killed thousands, mostly at the site of the former World Trade Center, was dead. See more on U.S. raid in Pakistan in which bin Laden died.
While bin Laden’s al Qaeda organization “still exists and future strikes remain a risk … reality is al Qaeda has not focused on oil supply/transportation targets over the past decade, so [we] don’t think bin Laden’s death should have significant impact on crude (up or down),” the Houston-based energy research firm said in a comment to clients.
