Oil Slightly Lower
Apr 29th, 2009 | By Doug Casey | Category: Oil Investment & Alternative EnergyIn the energy market on Tuesday, crude for June delivery backed off, slipping below $50 to close at $49.92/barrel, down 22 cents. May reformulated gasoline dropped just under a penny, to $1.3995/gallon.
Analysts said the day’s action was all about fear once again, as the concern is that a spreading swine-flu outbreak will curtail travel and delay recovery in the global economy, in turn reducing oil demand.
“The disease brings SARS and the resulting collapse in Asian oil demand to mind,” wrote Hussein Allidina, a commodities analyst at Morgan Stanley (NYSE:MS).
Allidina added that, “Oil’s recent rally has been fueled by the green shoots of economic recovery, and the outbreak will draw attention to the fragility of the recovery, and hence the basis for oil’s rally.”
However, “if the outbreak remains contained, its impact will be much less significant than SARS,” Allidina said.
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