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Oil falls below US$86
Source: Agencies |
January 28, 2011, Friday
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OIL prices fell yesterday on a batch of disappointing economic news.
Benchmark oil for March delivery lost US$1.69 to settle at US$85.64 a barrel on the New York Mercantile Exchange.
The Commerce Department said durable goods orders, excluding transportation, rose just 0.5 percent last month following a much stronger 4.5 percent November increase. Yet overall demand for durables fell for a second straight month. Durable goods are factory products expected to be used for at least three years, like appliances.
In addition, the Labor Department said the number of Americans applying for unemployment benefits rose last week.
The possibility China may raise interest rates or take other tightening measures before Lunar New Year holidays begin next week also kept a lid on oil prices.
"There is still a strong probability that China's central bank will raise interest rates or increase reserve requirements again to cool economic growth there," energy consultants Cameron Hanover said in a report.
Adding to the caution, the Energy Department said U.S. stockpiles of oil and gasoline rose more than expected last week.
Crude supplies expanded by 4.8 million barrels to 340.6 million barrels. Gasoline supplies rose by 2.4 million barrels to 230.1 million barrels, while demand in the past four weeks increased 1.1 percent. Supplies of distillate fuel, which includes diesel and heating oil, declined by 100,000 barrels to 165.7 million barrels.
"Prices will likely remain within a US$80-US$95 trading range ... with the downside bias becoming more noticeable during the beginning of the second quarter when crude enters it seasonally weaker period," said senior commodity analyst Edward Meir at MF Global in New York.
In other Nymex contracts for February contracts, heating oil lost 1.62 cents to settle at US$2.6551 a gallon and gasoline gave up 4.34 cents to settle at US$2.4132 a gallon.
Natural gas futures for March gave up 18.2 cents, or 4 percent, to settle at US$4.319 per 1,000 cubic feet. Natural gas prices fell as winter headed into its final months with plenty of gas still on hand across the country. The winter has been colder than normal in many parts of the U.S., but some forecasts see temperatures moderating around mid-February. That has created some uncertainty about how much more natural gas will be used before spring and warmer weather arrive.
In London, Brent crude lost 52 cents to settle at US$97.39 a barrel on the ICE Futures exchange.
Benchmark oil for March delivery lost US$1.69 to settle at US$85.64 a barrel on the New York Mercantile Exchange.
The Commerce Department said durable goods orders, excluding transportation, rose just 0.5 percent last month following a much stronger 4.5 percent November increase. Yet overall demand for durables fell for a second straight month. Durable goods are factory products expected to be used for at least three years, like appliances.
In addition, the Labor Department said the number of Americans applying for unemployment benefits rose last week.
The possibility China may raise interest rates or take other tightening measures before Lunar New Year holidays begin next week also kept a lid on oil prices.
"There is still a strong probability that China's central bank will raise interest rates or increase reserve requirements again to cool economic growth there," energy consultants Cameron Hanover said in a report.
Adding to the caution, the Energy Department said U.S. stockpiles of oil and gasoline rose more than expected last week.
Crude supplies expanded by 4.8 million barrels to 340.6 million barrels. Gasoline supplies rose by 2.4 million barrels to 230.1 million barrels, while demand in the past four weeks increased 1.1 percent. Supplies of distillate fuel, which includes diesel and heating oil, declined by 100,000 barrels to 165.7 million barrels.
"Prices will likely remain within a US$80-US$95 trading range ... with the downside bias becoming more noticeable during the beginning of the second quarter when crude enters it seasonally weaker period," said senior commodity analyst Edward Meir at MF Global in New York.
In other Nymex contracts for February contracts, heating oil lost 1.62 cents to settle at US$2.6551 a gallon and gasoline gave up 4.34 cents to settle at US$2.4132 a gallon.
Natural gas futures for March gave up 18.2 cents, or 4 percent, to settle at US$4.319 per 1,000 cubic feet. Natural gas prices fell as winter headed into its final months with plenty of gas still on hand across the country. The winter has been colder than normal in many parts of the U.S., but some forecasts see temperatures moderating around mid-February. That has created some uncertainty about how much more natural gas will be used before spring and warmer weather arrive.
In London, Brent crude lost 52 cents to settle at US$97.39 a barrel on the ICE Futures exchange.
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