Futures slid as Brent dropped as much as 3.1 percent, which could reduce the price of imported crude used to manufacture products. Saudi Arabia is pumping about 10 million barrels a day of crude and will produce more if customers demand it, a Persian Gulf official with knowledge of the matter said yesterday. Gasoil dropped 2.8 percent in London, reducing the incentive to ship fuel from the U.S. to Europe.
“Heating oil has gone down as Brent is under pressure as the Saudis feel the current price is too high and they have been increasing production,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Heating oil for October delivery fell 6.03 cents, or 1.9 percent, to $3.0668 a gallon at 9:56 a.m. on the New York Mercantile Exchange.
Brent for November settlement declined $2.85, or 2.5 percent, to $109.18 a barrel on the ICE Futures Europe exchange. Gasoil for October delivery fell $27.25 to $961.25 a ton.
The ideal price of crude for OPEC is $100 a barrel and current prices are not supported by the fundamentals, the Persian Gulf official said, declining to be identified because he’s not authorized to speak publicly.
The Energy Department is scheduled to report last week’s inventories at 10:30 a.m. today in Washington.
The department will probably report that distillate inventories, which include heating oil and diesel, increased 1 million barrels, according to the median estimate of nine analysts in a survey by Bloomberg News. Gasoline inventories rose 1 million barrels last week, the survey showed.
October-delivery gasoline fell 5.62 cents, or 1.9 percent, to $2.8428 a gallon on the exchange.
Regular gasoline at the pump fell 0.5 cent to $3.854 a gallon yesterday, AAA data showed. Prices reached a 2012 high of $3.936 on April 4.
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