SAN FRANCISCO (MarketWatch) -- Crude-oil futures fell Friday, sending the December contract to its lowest level in 17 months, as concerns over global energy production continued to ease and volatility associated with the expiration of the front-month contract increased.
Market speculation that a major hedge-fund was in trouble also contributed to the weakness. The December contract was ready to end the week with a loss of more than 7%.
"Normally with oil, we've noticed a pattern that futures have sold off close to expiration," said Phil Flynn, a senior analyst at Alaron Trading.
But some traders are speculating about the potential that a commodity fund may be "in trouble" -- losing money and forced to get out of long positions, he said. That in turn would cause the market to fall more than it normally would have, he said.
Crude for December delivery dropped $1.16 to $55.10 a barrel on the New York Mercantile Exchange. Crude hit an intraday low of $55.08 after bottoming at $54.86 in overnight electronic trading -- the weakest levels for the contract since early in June 2005.
Market speculation that a major hedge-fund was in trouble also contributed to the weakness. The December contract was ready to end the week with a loss of more than 7%.
"Normally with oil, we've noticed a pattern that futures have sold off close to expiration," said Phil Flynn, a senior analyst at Alaron Trading.
But some traders are speculating about the potential that a commodity fund may be "in trouble" -- losing money and forced to get out of long positions, he said. That in turn would cause the market to fall more than it normally would have, he said.
Crude for December delivery dropped $1.16 to $55.10 a barrel on the New York Mercantile Exchange. Crude hit an intraday low of $55.08 after bottoming at $54.86 in overnight electronic trading -- the weakest levels for the contract since early in June 2005.
