Last Updated on Tuesday, 30 November 1999 05:00 Thursday, 18 August 2011 10:31
Oil dropped from a two-day high in New York as investors bet fuel demand will falter amid signs of weaker growth in the U. S. and Europe.
Futures declined as much as 0. 6 percent today before reports that may show U. S. jobless claims increased last week and manufacturing in the Philadelphia region slowed this month. Crude supplies rose 4. 23 million barrels, an Energy Department report showed. They were forecast to drop 500,000 barrels. Asian equities fell after two Federal Reserve officials opposed a pledge to keep U. S. interest rates at record lows.
Continuing concerns over the health of the U. S. and European economies will cap gains, which will be modest until the end of the year, said Victor Shum, a senior principal at Purvin & Gertz Inc. in Singapore. Crude oil will fluctuate between $80 and $100 in the short term.
Crude for September delivery slipped as much as 56 cents to $87. 02 a barrel in electronic trading on the New York Mercantile Exchange, and was at $87. 30 at 1:58 p. m. Sydney time. The contract yesterday gained 93 cents to $87. 58, the highest since Aug. 15. Prices are 16 percent higher the past year.
Brent oil for October settlement was at $110. 50 a barrel, down 10 cents, on the London-based ICE Futures Europe exchange. The contract yesterday advanced $1. 47, or 1. 4 percent, to $110. 60. Prices are 45 percent higher the past year.
U. S. Inventories
U. S. crude oil inventories rose to 354 million in the week ended Aug. 12, according to the Energy Department report. The nation s Strategic Petroleum Reserve is releasing stockpiles in coordination with the Paris-based International Energy Agency.
The Energy Department has delivered 20. 4 million barrels of oil from emergency reserves since July 17, according to its website. The government sold 30. 64 million barrels to companies in cooperation with the IEA.
Supplies at Cushing, Oklahoma, the delivery point for New York-traded West Texas Intermediate, fell 893,000 barrels to 33. 7 million, the lowest since November, the report showed. Gasoline inventories dropped 3. 51 million barrels to 210 million. They were forecast to decline 1. 18 million barrels, according to the Bloomberg News survey. Stockpiles typically shrink in summer amid the May-to-September peak driving season.
Refinery use dropped to 89. 1 percent of capacity from 90 percent. U. S. refineries boost distillate-fuel output during the second half of the year, making diesel for farm machinery and heating oil for winter use in the Northern Hemisphere.
Asian stocks fell for the first time in four days. The MSCI Asia Pacific Index slid 0. 7 percent. Federal Reserve Chairman Ben S. Bernanke s pledge last week to keep interest rates near zero until mid-2013 was inappropriate policy at an inappropriate time, Charles Plosser, president of the Fed Bank of Philadelphia, said yesterday in a Bloomberg radio interview.
Dallas President Richard Fisher said the central bank shouldn t enact policy to protect stock investors. Both officials dissented from the Fed s Aug. 9 statement.
U. S. initial jobless claims climbed by 5,000 to 400,000 in the week ended Aug. 13, according to the median estimate in a Bloomberg News survey before a report today. Continuing claims may have increased by 12,000 to 3. 7 million.
The Federal Reserve Bank of Philadelphia s general economic index declined to 2 this month from 3. 2 in July, according to the median forecast of economists in a separate survey.
German Chancellor Angela Merkel and French President Nicolas Sarkozy this week rejected an expansion of the 440 billion-euro ($634 billion) rescue fund and rebuffed calls for joint euro borrowing to end the debt crisis, saying greater economic integration was needed first.
Oil in New York also fell after settling below technical resistance at $87. 59 a barrel for a second day yesterday, according to data compiled by Bloomberg. That s the 38. 2 percent Fibonacci retracement of prices in the past year. A failure to breach chart resistance usually means prices will extend a drop.
Exports of crude oil by OPEC member countries rose 2 percent in June after Saudi Arabia boosted shipments by 7. 9 percent, according to data supplied to the Joint Organization Data Initiative.
The Organization of Petroleum Exporting Countries shipped 22. 54 million barrels a day in June, up from 22. 11 million in May, according to data posted on the website. The association is supervised by the Riyadh-based International Energy Forum and compiles data from primary sources.
Courtesy: Bloom Berg
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