Related News:
Oil Falls for Second Day on Speculation Demand Will Drop as Summer Ends
Oil fell for a second day in New York on speculation fuel demand will decline as the U.S. summer peak consumption season ends and amid concern over the pace of the global economic expansion.
The U.S. Labor Day holiday today marks the end of the peak driving season, prompting traders to bet more on falling gasoline prices rather than rising for the first time in almost four years. Futures dropped Sept. 3 after the Institute for Supply Management’s index of non-manufacturing business, covering about 90 percent of the U.S. economy, expanded the least since January.
“With the summer driving season now being over, we can certainly expect that lower gasoline demand will have an impact on oil prices,” said Serene Lim, a commodity analyst at Australia & New Zealand Banking Group Ltd. in Singapore. “The weak non-manufacturing numbers caused a bit of a panic in the oil market.”
Crude for October delivery fell as much as 51 cents, or 0.7 percent, to $74.09 a barrel in electronic trading on the New York Mercantile Exchange. It was at $74.37 at 2:53 p.m. Singapore time. On Sept. 3, the contract slipped 0.6 percent to settle at $74.60, the first drop in three days. Futures are down 6.3 percent this year.
There will be no floor trading on the Nymex today because of the U.S. holiday, with all electronic trades counted as part of the Sept. 7 session.
Gasoline Shorts
Net-short positions held by money managers in gasoline futures and options increased to 1,169 contracts the week ended Aug. 31, the first time speculators have been bearish since November 2006, according to the U.S. Commodity Futures Trading Commission’s weekly report Sept. 3. Hedge funds cut bullish bets for four straight weeks.
U.S. gasoline demand slid 3.1 percent to a 12-week low in the seven days ended Aug. 27, MasterCard Inc. said in its weekly SpendingPulse report.
Gasoline futures in New York have dropped 13 percent since peaking for the summer on Aug. 3. The October contract was at $1.9160 a gallon, down for a second day.
U.S. service industries grew in August at the weakest pace in seven months, signaling that the U.S. economic rebound may slow. The index fell to 51.5 in August from 54.3 the prior month, the ISM said.
“The thing that dampened the optimistic sentiment from the employment report was the non-manufacturing ISM for August,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “People are still cautious, there is still a lot of uncertainty.”
Saudi Oil
Saudi Aramco, the world’s biggest state-owned oil company, raised official selling prices for all crude grades to be shipped next month, according to a document issued yesterday.
Saudi Arabia was the fourth-largest crude exporter to the U.S. last year, slipping from second place in 2008, according to data from the U.S. Energy Information Administration. Its customers are in Asia, the U.S., Northwest Europe and the Mediterranean.
Brent crude for October settlement dropped as much as 49 cents, or 0.6 percent, to $76.18 on the London-based ICE Futures Europe exchange, and traded at $76.59. On Sept. 3, the contract fell 0.3 percent to settle at $76.67.
Jobs Report
The U.S. Labor Department said Sept. 3 private payrolls advanced by 67,000, after a revised 107,000 increase in July. Overall employment fell 54,000 for a second month and the unemployment rate rose to 9.6 percent.
“Until you really see the unemployment rate decline, it’s difficult to see consumer spending picking up significantly,” said Westmore at National Australia Bank.
Hedge-fund managers and other large speculators decreased their net-long position in New York crude futures in the week ended Aug. 31, according to data from the Commodity Futures Trading Commission.
Speculative long positions, or bets prices will rise, outnumbered short positions by 13,120 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 14,203 contracts, or 52 percent, from a week earlier.
To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net
Rate These Stories
Rate this Page