By Christian Schmollinger and Lananh Nguyen - Sep 19, 2011 6:40 PM GMT+0700
Sept. 19 (Bloomberg) -- Samuel Ciszuk, a senior Middle East energy analyst at IHS Energy, discusses Abdalla el-Badri's leadership of the Organization of Petroleum Exporting Countries. He speaks with Owen Thomas on Bloomberg Television's "Countdown." (Source: Bloomberg)
Oil fell to a one-week low in New York on speculation fuel demand will falter as economic growth in the U.S. weakens and the debt crisis in Europe worsens. Brent oil’s premium to U.S. futures widened.
Crude dropped as much as 1.8 percent after European finance ministers ruled out using stimulus measures to spur the economy. OPEC Secretary-General Abdalla El-Badri said today that global demand for oil is rising less than expected. Reports this week may show U.S. home sales held near the lowest this year and construction fell. Government data last week showed U.S. fuel use shrank.
“The increasingly gloomy economic situation might stop crude’s recent upward trend,” analysts led by David Wech at Vienna-based researcher JBC Energy GmbH said in a note today.
Oil for October delivery on the New York Mercantile Exchange fell as much as $1.61 to $86.35 a barrel, the lowest price since Sept. 12, and was at $87.15 at 12:36 p.m. London time. The more actively traded November contract slid 87 cents, or 1 percent, to $87.31. Front-month futures have lost 4.6 percent this year.
Brent crude for November settlement dropped 29 cents to $111.93 a barrel on the London-based ICE Futures Europe Exchange. The European benchmark future was at a premium of $24.62 to the November price of West Texas Intermediate, compared with a record settlement of $26.87 on Sept. 6.
OPEC Outlook
El-Badri said fiscal woes in Europe and high unemployment in the U.S. are curbing global oil-demand growth. Crude supply from the Organization of Petroleum Exporting Countries may be boosted by 500,000 to 600,000 barrels a day from Libya’s eastern and western fields “soon,” he said at a conference in Dubai.
Fighting in Libya since February has reduced the availability of light, sweet crude, or oil with low density and sulfur content. The country’s output fell to 45,000 barrels a day last month, according to Bloomberg estimates, compared with the 1.6 million barrels a day the nation pumped in January.
European finance leaders meeting with U.S. Treasury Secretary Timothy Geithner last week in Poland said their 18- month debt crisis leaves no room for tax cuts or extra spending to spur an economy that will barely grow in the second half of 2011. The 17 euro nations accounted for about 12 percent of global oil demand in 2010, according to Bloomberg calculations based on BP Plc’s annual Statistical Review of World Energy.
“If the markets were looking for a positive, meaningful surprise from the two days of talks going on in Europe, they did not get it,” Edward Meir, a New York-based analyst at MF Global Holdings Ltd. said in a note today. “As a result of the looming deadlock with Greece and the rather inconclusive negotiations, we could see a negative turn for commodity markets.”
U.S. housing starts dropped 2.3 percent in August from July, according to the median estimate of 64 economists surveyed by Bloomberg News before a Commerce Department report tomorrow. Existing-home sales probably rose 1.7 percent from an eight- month low, a separate poll showed.
Oil in New York also declined after front-month futures failed to breach the 50-day moving average for a fourth day on Sept. 16, according to data compiled by Bloomberg. This indicator is at $90.16 a barrel today. Investors tend to sell contracts when a price advance stalls below a technical- resistance level.
Hedge funds raised bullish bets on oil by the most since March in the week ended Sept. 13 as a storm curtailed production in the Gulf of Mexico, according to the U.S. Commodity Futures Trading Commission’s Commitments of Traders report. West Texas futures gained 4.9 percent in the period of the report and have dropped 3.7 percent since then.
No named storms or tropical cyclones are active in the Atlantic or Pacific, the U.S. National Hurricane Center’s website shows. Tropical Storm Maria was downgraded to a post- tropical cyclone on Sept. 16 after crossing Newfoundland, according to the center.
To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net Lananh Nguyen in London at lnguyen35@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
Posts
No comments:
Post a Comment