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Oil back at price last seen a year ago
Source: Agencies |
October 1, 2011, Saturday
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OIL prices are back to where they were a year ago.
Yesterday benchmark crude dropped US$2.94, or 3.6 percent, to end the day at US$79.20 per barrel in New York. Prices haven't finished that low since Thursday. Since then crude peaked near US$114 a barrel in May of this year. It's fallen 31 percent since then as worries grew about the global economy.
Government data pointed to further economic troubles heading into a traditionally weak time for petroleum demand. The Commerce Department said that Americans are earning less money, which could affect consumer spending and demand for oil. And October is usually a slow month in the oil business. The summer driving season is over, and it will be a couple of months before heating demand perks up and travelers set out for winter holidays.
"There just isn't any demand here in the US," independent oil analyst Andrew Lipow said.
Brent crude, used to price many international kinds of oil, lost US$1.19 to finish at US$102.76 in London.
Oil has swung up and down in the last few weeks, as the European financial crisis roiled energy markets. By yesterday traders had turned their attention to falling crude price forecasts from major investment firms.
Morgan Stanley this week dropped its forecast for Brent crude by US$30 to an average of US$100 per barrel in 2012. Analyst Hussein Allidina cut the price to match tepid global economic growth and a recovery in Libyan oil production.
Allidina expects "significant supply increases and a material slowing in demand" by the second quarter of next year.
In other energy trading, heating oil fell 4.73 cents to finish at US$2.7793 per gallon and gasoline futures dropped 2.05 cents to end at US$2.5381 per gallon. Natural gas lost 8.1 cents to end the day at US$3.666 per 1,000 cubic feet.
Yesterday benchmark crude dropped US$2.94, or 3.6 percent, to end the day at US$79.20 per barrel in New York. Prices haven't finished that low since Thursday. Since then crude peaked near US$114 a barrel in May of this year. It's fallen 31 percent since then as worries grew about the global economy.
Government data pointed to further economic troubles heading into a traditionally weak time for petroleum demand. The Commerce Department said that Americans are earning less money, which could affect consumer spending and demand for oil. And October is usually a slow month in the oil business. The summer driving season is over, and it will be a couple of months before heating demand perks up and travelers set out for winter holidays.
"There just isn't any demand here in the US," independent oil analyst Andrew Lipow said.
Brent crude, used to price many international kinds of oil, lost US$1.19 to finish at US$102.76 in London.
Oil has swung up and down in the last few weeks, as the European financial crisis roiled energy markets. By yesterday traders had turned their attention to falling crude price forecasts from major investment firms.
Morgan Stanley this week dropped its forecast for Brent crude by US$30 to an average of US$100 per barrel in 2012. Analyst Hussein Allidina cut the price to match tepid global economic growth and a recovery in Libyan oil production.
Allidina expects "significant supply increases and a material slowing in demand" by the second quarter of next year.
In other energy trading, heating oil fell 4.73 cents to finish at US$2.7793 per gallon and gasoline futures dropped 2.05 cents to end at US$2.5381 per gallon. Natural gas lost 8.1 cents to end the day at US$3.666 per 1,000 cubic feet.
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