U.S. crude crashes below $60 as six-month rout pushes on
By Barani Krishnan
NEW YORK (Reuters) - U.S. crude fell below $60 a barrel on Thursday for the first time in five years, breaking through a key psychological support level that triggered fresh selling as some traders said they saw no reason for a rebound any time soon.
While better U.S. economic data supported the market earlier in the day, those gains could not be sustained toward the close. In the absence of any news that could temper the bearish mood, traders said pent-up pressure led to a late-selloff that carried on after the close, pushing prices as low as $58.96.
Traders and analysts said a bottom for oil remained elusive after a six-month selloff that has nearly halved price levels. Few could guess how low prices would go and when they might return to the $100 heyday last seen during the summer.
"For this market to come back quickly, you need a major event that would really shut off supply in a drastic way, like the trouble in Libya really getting out of hand or the Russians coming out and saying they'll lower their production, which nobody expects them to do anyway," said Joseph Posillico, senior vice president of energy futures at Jefferies in New York.
U.S. crude's front-month contract CLc1 settled down 99 cents, or 1.6 percent, at $59.95 a barrel, after falling to $59.56, its lowest since July 2009. It fell another $1 a barrel after the close as traders bet on deeper losses.
Just in June, the front-month was at a nine-month high above $107 on supply disruptions caused by fighting in Iraq.
Brent crude's front-month LCOc1 ended down 56 cents at $63.68, after the benchmark for global oil plumbed a 5-1/2-year low at $63.48. Brent traded above $115 in June.
Prices tanked for a second day in a row after Wednesday's 5 percent drop caused by a surprise jump in U.S. crude stocks and reiteration by Saudi Arabia's oil minister Ali al-Naimi - OPEC's most influential voice - that the kingdom will not cut output. Continued...