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Int'l oil prices fall on debt plan doubts
Source: Agencies |
October 26, 2011, Wednesday
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INTERNATIONAL oil prices fell yesterday on disappointing corporate earnings in the US and doubts that European leaders can agree on a plan to resolve that region's debt crisis.
The price of Brent, which is used to price oil imported into the US, fell 53 cents to end the day at US$110.92 per barrel in London.
Another key variety of crude saw higher prices on yesterday. Benchmark US crude - known as West Texas Intermediate - is now at its highest level since early August. The price is up partly because of a complicated trading strategy under which energy traders sell Brent and buy WTI to make money on the price difference.
WTI on yesterday rose US$1.90, or 2.1 percent, to finish at US$93.17 a barrel in on the New York Mercantile Exchange.
A sustained rise in WTI could eventually push gasoline prices higher, but analysts say that's not likely. US refineries rely more on Brent than WTI, and Brent prices are falling. Also, compared with last year, motorists are buying much less gasoline, even for the fall. MasterCard SpendingPulse, which tracks retail gasoline purchases in the US, says drivers have cut back at the pump for nearly eight months in a row.
MasterCard's latest survey, which was released yesterday, said motorists bought 61.8 million barrels of gasoline last week, 2.8 percent less than the same period last year. Experts say motorists are cutting back because they can't afford to buy more. Prices flirted with US$4 per gallon (US$1.05 a liter) in May, and a gallon of regular is still about 63 cents higher than it was a year ago.
Overall, gasoline is expected to average at US$3.52 per gallon this year, a record high for the average price.
In other energy trading, heating oil was essentially flat, ending at US$3.0502 per gallon and gasoline futures added 1.1 cents to finish at US$2.6998 per gallon. Natural gas rose 5.4 cents to finish at US$3.658 per 1,000 cubic feet.
In corporate news, manufacturing conglomerate 3M cut its 2011 earnings forecast, and US Steel warned that demand for its products could slow. Netflix Inc. shares plunged after the company cut its profit forecast and said it is losing subscribers following a price increase in July.
Investors are also concerned about whether European leaders can agree on a comprehensive solution for the region's debt crisis in time for a summit today.
European officials are working to patch together a plan that will prevent banks from taking huge losses if the Greek government defaults on its bonds. A messy default could lead to a credit freeze-up similar to the one in 2008 following the fall of Lehman Brothers.
The price of Brent, which is used to price oil imported into the US, fell 53 cents to end the day at US$110.92 per barrel in London.
Another key variety of crude saw higher prices on yesterday. Benchmark US crude - known as West Texas Intermediate - is now at its highest level since early August. The price is up partly because of a complicated trading strategy under which energy traders sell Brent and buy WTI to make money on the price difference.
WTI on yesterday rose US$1.90, or 2.1 percent, to finish at US$93.17 a barrel in on the New York Mercantile Exchange.
A sustained rise in WTI could eventually push gasoline prices higher, but analysts say that's not likely. US refineries rely more on Brent than WTI, and Brent prices are falling. Also, compared with last year, motorists are buying much less gasoline, even for the fall. MasterCard SpendingPulse, which tracks retail gasoline purchases in the US, says drivers have cut back at the pump for nearly eight months in a row.
MasterCard's latest survey, which was released yesterday, said motorists bought 61.8 million barrels of gasoline last week, 2.8 percent less than the same period last year. Experts say motorists are cutting back because they can't afford to buy more. Prices flirted with US$4 per gallon (US$1.05 a liter) in May, and a gallon of regular is still about 63 cents higher than it was a year ago.
Overall, gasoline is expected to average at US$3.52 per gallon this year, a record high for the average price.
In other energy trading, heating oil was essentially flat, ending at US$3.0502 per gallon and gasoline futures added 1.1 cents to finish at US$2.6998 per gallon. Natural gas rose 5.4 cents to finish at US$3.658 per 1,000 cubic feet.
In corporate news, manufacturing conglomerate 3M cut its 2011 earnings forecast, and US Steel warned that demand for its products could slow. Netflix Inc. shares plunged after the company cut its profit forecast and said it is losing subscribers following a price increase in July.
Investors are also concerned about whether European leaders can agree on a comprehensive solution for the region's debt crisis in time for a summit today.
European officials are working to patch together a plan that will prevent banks from taking huge losses if the Greek government defaults on its bonds. A messy default could lead to a credit freeze-up similar to the one in 2008 following the fall of Lehman Brothers.
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