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Oil Recovers from Worst Fall in Two Years

May 6, 2011 at 3:52 by Vladimir Vyun

Oil was slowly recovering today after yesterday it posted the biggest drop in two years. Oil’s relative strength index dropped to 32, the lowest level since August 24. The index still remains above 30, suggesting that the commodity has potential to gain.

Oil quickly dropped below $100 as decline of other commodities indicates that the global recovery is probably slowing. One of the sources of concern is the labor market of the US as unemployment claims unexpectedly increased from 431,000 to 474,000 last week and the nonfarm payrolls today are predicted to show slower growth of employment.

June contract for crude oil delivery rose $1.08 to $100.88 per barrel in electronic trading on NYMEX. Yesterday prices dropped $9.44 to $99.80, the lowest since March 16 and the biggest decline since April 20, 2009. June futures for Brent crude delivery gained $1.71 (1.5 percent) to $112.51 per barrel on ICE, following the yesterday’s slump by $10.39 (8.6 percent) to $110.80.

If you have any questions and comments on the commodities today, use the form below to reply.

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