Oil Extends Decline in New York After Biggest Drop in Two Months
Oil extended its decline after the biggest drop in two months on speculation that a slowing U.S. economy may curb fuel demand.
Futures fell as much as 0.7 percent in New York, adding to a 2.4 percent drop in the previous session that was the most in two months. Crude tumbled more than $3 in less than a minute yesterday as October options were about to expire. The Federal Reserve Bank of New York’s general economic index, known as the Empire State Index, fell to a three-year low. The government reiterated that it is considering ways to prevent oil prices from curbing economic growth.
“The overnight falls have introduced some concerns about long positions,” or bets that prices will rise, said Michael McCarthy, a chief market strategist at CMC Markets in Sydney.
Oil for October delivery fell as much as 64 cents to $95.98 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.05 at 3:30 p.m. Singapore time. The contract slid $2.38 yesterday to $96.62, the lowest close since Sept. 10. Prices are 2.8 percent lower this year.
Brent oil for November settlement fell 29 cents to $113.50 a barrel on the London-based ICE Futures Europe exchange. It dropped 2.5 percent yesterday. The front-month European benchmark grade’s premium to the corresponding West Texas Intermediate contract was at $17.06, from $16.84 yesterday.
CME Group Inc. suffered from no technical issues as crude oil, gasoline and heating oil dropped on Nymex, said Chris Grams, a spokesman for CME. The U.S. Commodity Futures Trading Commission in Washington will look into the decline and trading surge, Commissioner Bart Chilton said.
The White House hasn’t changed its position on U.S. strategic oil reserves and “all options remain on the table,” Jay Carney, a government spokesman, said in an e-mail yesterday. The Obama administration is continuing to look at all its options to make sure high oil prices don’t crimp the global economy, Carney said Aug. 30.
An Energy Department report tomorrow may show crude stockpiles rose a second week, according to a Bloomberg News survey of analysts. Inventories probably climbed 1 million barrels last week, according to the median estimate of seven analysts.
Gasoline supplies probably rose by 1.5 million barrels, the first gain in eight weeks. Inventories of distillate fuel, a category that includes diesel and heating oil, probably rose for a sixth week, gaining 1 million barrels, the survey showed.
The American Petroleum Institute will release separate stockpile data today. The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Retail gasoline prices climbed above year-earlier levels for the sixth consecutive week, tracking oil futures that rose above $100 a barrel on Sept. 14 for the first time since May.
The national average for regular gasoline climbed 3.1 cents, or 0.8 percent, to $3.878 a gallon from a week earlier, the U.S. Energy Information Administration said in a report posted on its website yesterday. Prices are up 7.7 percent from $3.601 in 2011 and at a record high for this time of year.
The Federal Reserve Bank of New York’s general economic index released yesterday dropped to minus 10.41, the lowest level since April 2009, from minus 5.85 in August. The median forecast of 53 economists in a Bloomberg survey called for minus 2. Readings less than zero signal contraction for the area of New York, northern New Jersey and southern Connecticut.
To contact the reporter on this story: Ramsey Al-Rikabi in Singapore at email@example.com