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Oil falls on flu pandemic fears

Apr 27 2009 10:59

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London - Oil prices fell more than 4% towards $49 a barrel on Monday, pressured by fears of a global flu pandemic that could prove another setback for the fragile world economy.

US crude oil futures for June delivery were down $2.11 to $49.44 a barrel by 07:58 GMT, erasing some of Friday's gains of $1.93 that brought the contract to settle at $51.55.

London Brent crude was down $1.86 at $49.81 a barrel.

The swine flu fears hit equity markets in Asia and Europe, adding to investor nerves about the release this week US bank "stress test" results, a Federal Reserve meeting and a flood of corporate earnings.

"Nervousness about another batch of US earnings reports and macro reports, coupled with a potential pandemic out of Mexico, are both weighing on prices," said Edward Meir of broker MF Global in a research note. "The Mexican situation is resurrecting fears of the chilling impact that the SARS epidemic had on economic growth."

Gulf oil producers said on Sunday they can tolerate moderate crude prices for longer to help revive global growth but shared a concern with consumer nations that a prolonged period of low prices could sow the seeds of a future fuel price spike.

Crude oil speculators on the New York Mercantile Exchange shifted to a net short position in the week to April 21, according to data from the US Commodity Futures Trading Commission released on Friday.

- Reuters

 
 
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