Oil fell a second day in New York, heading for the longest weekly losing streak in more than 13 years, on speculation the economies of the U.S. and China, the world’s biggest crude consumers, will slow and curb fuel demand.
Futures dropped as much as 2.6 percent. Federal Reserve officials need to assess the risk from Europe’s debt crisis and U.S. budget cuts before deciding on stimulus measures, Fed Chairman Ben S. Bernanke said to the Joint Economic Committee yesterday. China reports economic data tomorrow after cutting interest rates for the first time since 2008. Global crude supply is sufficient, Youcef Yousfi, Algeria’s energy minister, said before OPEC meets next week in Vienna.
“I don’t think anybody is really going to be carrying much of a position into the weekend with the China data dump,” said Nick Trevethan, a senior commodities strategist at Australia & New Zealand Banking Group Ltd. (ANZ) in Singapore who forecasts New York crude may drop to as low as $82 a barrel. “Certainly the market is concerned about what the data may bring.”
Oil for July delivery decreased as much as $2.23 to $82.59 a barrel in electronic trading on the New York Mercantile Exchange, and was at $82.86 at 5:49 p.m. Sydney time. The contract yesterday slipped 0.2 percent to $84.82, the lowest close since June 5. Prices are down 0.4 percent since June 1 and poised for a sixth weekly decline, the longest losing streak since December 1998. Oil has fallen 16 percent this year.
Brent for July settlement slid $1.59, or 1.6 percent, to $98.34 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $15.48, from $15.11 yesterday.
China reports inflation, investment and output figures tomorrow that may signal the economy is weaker than the government anticipated as Europe’s debt crisis threatens global growth. The nation’s central bank reduced the one-year lending and deposit rates by a quarter percentage point yesterday and loosened controls on the cost of loans.
China may also announce its biggest cut to gasoline and diesel prices since at least 2008 after the slump in global crude. State-controlled fuel will drop by 620 yuan ($97) a metric ton, equivalent to 28 cents a gallon, starting tomorrow, according to C1 Energy, a commodity researcher that has correctly reported the timing and size of changes before government announcements.
The Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s crude, will study prices to keep the market balanced when it meets in Vienna on June 14, Algeria’s Yousfi said yesterday at the World Gas Conference in Kuala Lumpur. The world has enough oil, he said.
OPEC plans to export 24.1 million barrels a day of crude, or 6.2 percent more than a year earlier, in the four weeks ending June 23, according to Oil Movements, a tanker tracker. The data exclude Angola and Ecuador.
Saudi Arabia, OPEC’s biggest producer, has been pumping more than 9.5 million barrels a day since June 2011, the longest stretch for at least 11 years, according to data from the U.S. Energy Department. Output is currently at 10 million barrels a day, Oil Minister Ali al-Naimi said in Tokyo on May 8. That’s the highest level since at least 1980, according to U.S. government data.
“If prices are pushed significantly below here OPEC may take some supply off the market,” according to Ric Spooner, a chief market analyst at CMC Markets in Sydney. “That’s a reason not to get too aggressive to the downside.”
Oil may rise next week, a Bloomberg survey showed. Nine of 25 analysts, or 36 percent, forecast prices will advance through June 15. Eight respondents, or 32 percent, predicted that futures will decline and eight said there will be little change. Last week, 52 percent of analysts expected prices to decrease.
To contact the reporter on this story: Ben Sharples in Melbourne at email@example.com