Forexpros –
Forexpros – Crude oil futures plunged during U.S. morning trade on Thursday, hitting a six week low, after France stated governments are moving closer to releasing strategic stockpiles, while fears over the recovery of the global economy prompted investors to dump riskier assets.
On the New York Mercantile Exchange, light sweet crude futures for delivery in May traded at USD102.86 a barrel during U.S. afternoon trade, plunging 2.42%.
Sparking the selloff, French Prime Minister Francois Fillon said earlier that the outlook for an agreement between the U.S. and European countries to release oil stockpiles in an effort to lower oil prices is positive.
Meanwhile, France’s Energy Minister Eric Besson told journalists on Wednesday that the U.S. had asked France to join it in a possible emergency inventory release.
Such a release could happen “in a matter of weeks,” French newspaper Le Monde said, citing presidential sources.
The Le Monde report also said that the French government was waiting for recommendations from the International Energy Agency before moving ahead.
Last week, reports surfaced that France and other industrialized nations were considering a release from strategic stockpiles.
U.S. President Barack Obama discussed releasing emergency oil supplies with U.K. Prime Minister David Cameron on March 14 but the leaders reached no agreement.
Though the report was denied by U.S. officials, it has still added a new dimension to the recent price increases, putting investors on watch for any government intervention.
Meanwhile, ongoing concerns over the global growth outlook and its implications on a slowdown in global demand also weighed.
Uncertainty over the outlook for the U.S. economic recovery was underlined earlier, following the release of mixed economic data.
The Department of Labor said the number of individuals filing for initial jobless benefits in the U.S. fell by 5,000 to a seasonally adjusted 359,000 last week, the lowest level since April 2008, but less than expectations for a decline to 350,000.
A separate report showed that the U.S. economy grew at an annualized rate of 3.0% during the final three months of 2011, unchanged from a preliminary estimate.
Investors are also concerned about recent signs of a slowdown in China. The U.S. and China are the world’s two largest oil consuming nations.
Spain’s debt problems were also on investors’ minds as a major general strike got underway, protesting austerity moves by the government.
Meanwhile, oil traders continued to monitor lingering tensions between Iran and Western powers and a potential disruption to supplies from the Islamic Republic.
Iran’s Foreign Minister Ali Akbar Salehi said Wednesday that renewed nuclear talks between Iran and six world powers are expected to take place on April 13. The six world powers include, the U.S., the U.K., France, Germany, Russia and China. A venue for the talks will be finalized in the coming days.
U.S. President Barack Obama said Sunday that there is still time to resolve the dispute over Iran diplomatically, but that the window is closing.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery dropped 1% to trade at 122.92 a barrel, with the spread between the Brent and crude contracts standing at USD19.56.
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