April 28 (Bloomberg) -- Crude oil fell for a second day on concern that fuel demand will drop as the swine-flu outbreak curtails travel and delays a recovery from the global recession.
Oil, gold and copper declined as the World Health Organization raised its global pandemic alert to the highest since the warning system was adopted in 2005, saying the disease is not containable. Crude rose in eight of the past 10 weeks as the stock market climbed on speculation that the economy and energy consumption would rebound later this year.
“There’s a potential that a swine-flu outbreak will crimp economic growth,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “There’s also recognition that the recent rally was overly optimistic. Demand isn’t recovering and more negative economic surprises are probably in store.”
Crude oil for June delivery fell 22 cents, or 0.4 percent, to settle at $49.92 a barrel at 2:44 p.m. on the New York Mercantile Exchange. Prices are up 12 percent this year.
Energy futures rose from the session’s lows after a report showed that U.S. consumer confidence jumped more than forecast in April. The Conference Board’s sentiment index climbed to 39.2, the highest level since November, from 26.9 in March, the New York-based research group said today.
Airline Pain
Airline stocks tumbled worldwide. U.S. carriers reported some cases of suspected flu-like symptoms to health authorities, the Air Transport Association trade group said. The U.S. Centers for Disease Control and Prevention recommended that nonessential travel to Mexico be avoided.
Air travel in Asia fell after the outbreak of Severe Acute Respiratory Syndrome in 2003.
“A number of comparisons have been made to SARS, but there are major differences between now and then,” said Nauman Barakat, senior vice president of energy at Macquarie Futures USA Inc. in New York. “I don’t think this will have the same impact as SARS because we are already in the midst of a major downturn and discretionary fuel demand is already down.”
Brent crude for June settlement fell 33 cents, or 0.7 percent, to end the session at $49.99 a barrel on London’s ICE Futures Europe exchange.
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