Oil Prices

The oil price has ingratiated itself with the lower price band for some time now closing below $73 a barrel in New York on Friday. There seems to be a melange of reasons at play for the price drop. First on the list- oil and gas prices have been rocked by the uncertainty about the extent of economic recovery.

The June job report, not on entirely unexpected lines, was grim with just 83,000 new private sector jobs added. Though lesser than anticipated it was better than the May figures when only 33,000 jobs were added. The unemployment figure did drop from 9.7 to 9.5 per cent-a modest gain, a gain nonetheless. However, analysts believe the drop happened as many people gave up their search for jobs.

On the whole, the job report indicates slow growth. The bearish job report didn't revive fears of recession but didn't offer any hope either. Soon after the jobs report, the price of U.S treasuries fell and the U.S stocks saw their worst week in two months. In Europe the shares closed higher though the German Bund futures fell. On Friday the Dollar fell against the Euro. The president expressed disappointment but said the nation was "headed in the right direction". He said, "We're not headed there fast enough for a lot of Americans," adding, "We're not headed there fast enough for me, either."

After nine consecutive months of northward march, factory orders declined in May-the sharpest since March-the commerce department announced on Friday. The orders for manufactured goods decreased 1.4 percent, the biggest since the March of last year. The departments said that demand for goods fell 2.1 percent. Both, the jobs report and the news from the manufacturing front, point to a slow recovery. The recovery is also an offshoot of the debt crisis in Europe- the governments in the region are moving to curb budget deficits through lower spending. The G-20 leaders have agreed, more or less, to deficit -reduction targets. Remember, a year ago it was times for a flurry of stimulus spending to avoid recession woes. Right now, the consumer confidence is low and so is the spending. Naturally, the demand is low for oil too.

Oil prices fell for the sixth consecutive trading session to jot the weakest price since June 9 with Crude oil dropping below the $73 a barrel in New York. The sweet crude for August delivery closed at $72.44 a barrel, down 4.1% at the New York stock, trading in the range of $75.40 to $72.36, heating oil was at $1.9155 a gallon losing 2.3 cents, and Natural gas settled for $4.687 per 1,000 cubic feet with a loss of 16.7 cents. In the ICE futures exchange, August North Sea Brent crude closed at $71.85 a barrel, 4.2 % lower. The tropical storm Alex, the first named one this hurricane season, didn't deter the oil prices as expected mid-week.