Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Oil Drops on Demand Concerns After Fed Cuts U.S. Growth Forecast

Oil declined for the first day in four in New York as investors speculated U.S. fuel demand may weaken after the Federal Reserve lowered its economic growth outlook for world’s biggest crude-consuming nation.

Futures slipped as much as 1.5 percent after Fed officials yesterday cut their forecasts for growth and employment this year and next. An Energy Department report showed U.S. oil stockpiles fell less than forecast and inventories at Cushing, Oklahoma, the delivery point for the New York-traded West Texas Intermediate grade, increased for the first time in four weeks.

“The fundamental story across the board is of limited growth,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted prices will average $100 a barrel this year. “We’ve got plenty of crude. It’s got to be a geopolitical event” to push crude above $100 a barrel again, he said.

Oil for August delivery declined as much as $1.41 to $94 a barrel in electronic trading on the New York Mercantile Exchange and was at $94.15 at 4 p.m. Sydney time. The contract yesterday rose $1.24, or 1.3 percent, to $95.41. Prices are 23 percent higher the past year.

Brent crude for August delivery fell $1.16, or 1 percent, to $113.05 a barrel on the London-based ICE Futures Europe exchange. The contract yesterday climbed $3.26, or 2.9 percent, to $114.21. It was the biggest gain since May 9. Prices are up 48 percent the past year.

Growth Forecasts

Fed governors and regional-bank presidents now say the U.S. economy will expand by 2.7 percent to 2.9 percent this year, down from April’s forecasts of 3.1 percent to 3.3 percent, based on the median range of projections. Growth in 2012 will range from 3.3 percent to 3.7 percent, compared with forecasts of 3.5 percent to 4.2 percent in April, the Fed said.

Central bankers raised their forecast range for the unemployment rate to average 8.6 percent to 8.9 percent in the fourth quarter of 2011, compared with projections of 8.4 percent to 8.7 percent in April.

U.S. crude stockpiles fell 1.71 million barrels to 363.8 million last week, according to the Energy Department report. They were forecast to decline 1.83 million barrels, a Bloomberg News survey of analysts showed. Supplies at Cushing climbed 273,000 barrels.

Distillate inventories, a category which includes heating oil and diesel, rose 1.17 million barrels, compared with a median forecast for a 550,000-barrel gain.

Gasoline supplies unexpectedly slid 464,000 barrels to 214.6 million, the Energy Department report showed. They were projected to increase by 1 million barrels, according to the median estimate of 17 analysts surveyed by Bloomberg News.

Brent, the European benchmark contract, traded at a premium of $18.90 a barrel to U.S. futures today. The difference between front-month contracts in London and New York reached a record close of $22.29 on June 15.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.