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Oil prices drop with few signs of demand pick up
Source: Agencies |
September 17, 2010, Friday
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CRUDE prices dropped yesterday after new government data signaled slower demand for oil and gas as the economy inches along in the slow lane.
Benchmark oil for October delivery lost US$1.45 to settle at US$74.57 a barrel on the New York Mercantile Exchange.
At the pump, motorists paid slightly more on average in part because of rising prices in the Midwest, where a pipeline has been closed for nearly a week, cutting off one supply of crude for refineries in the region.
The national average for a gallon of unleaded regular gasoline was US$2.734 a gallon yesterday, according to AAA, Wright Express and Oil Price Information Service. That's up 5.1 cents from a week ago and 17.8 cents from a year ago.
Motorists in the Midwest, including Illinois and Wisconsin, were paying some of the highest prices in the country - between US$2.868 a gallon and US$3.526 a gallon.
Analysts expect prices to fall after Enbridge Energy Partners reopens the 670,000-barrel-a-day pipeline later this week. The line was closed last week after it sprang a leak in a Chicago suburb.
A series of mixed economic reports contributed to yesterday's dip in oil prices.
The Mid-Atlantic industrial production report contracted in September for the second straight month, although the Philadelphia Fed manufacturing index improved in August.
The Labor Department said first-time jobless benefits claims fell to a two-month low but still indicate sluggish economic growth.
PFGBest analyst Phil Flynn said there are concerns that demand may be softening as the slowest time of the year for energy products is at hand, between the busy summer driving season and ahead of the winter heating months.
Natural gas prices fell after the government said stockpiles held in underground storage in the lower 48 states increased last week. But they reversed course to end the session higher. Natural gas gained 6.7 cents to settle at US$4.062 per 1,000 cubic feet.
Lind-Waldock senior market strategist Rich Ilczyszyn said he believes more traders are entering the market, hoping that the price of gas will start climbing.
"I really think this market is trying to find a bottom," he said.
Few traders think the two hurricanes in the Atlantic and one off Mexico's Gulf Coast will cause problems for oil and natural gas production and push up prices.
In other Nymex trading in October contracts, heating oil fell 3.36 cents to settle at US$2.0990 a gallon and gasoline fell 3.78 cents to settle at US$1.9247 a gallon.
In London, Brent crude for November delivery dropped 94 cents to settle at US$78.48 a barrel on the ICE Futures exchange.
Benchmark oil for October delivery lost US$1.45 to settle at US$74.57 a barrel on the New York Mercantile Exchange.
At the pump, motorists paid slightly more on average in part because of rising prices in the Midwest, where a pipeline has been closed for nearly a week, cutting off one supply of crude for refineries in the region.
The national average for a gallon of unleaded regular gasoline was US$2.734 a gallon yesterday, according to AAA, Wright Express and Oil Price Information Service. That's up 5.1 cents from a week ago and 17.8 cents from a year ago.
Motorists in the Midwest, including Illinois and Wisconsin, were paying some of the highest prices in the country - between US$2.868 a gallon and US$3.526 a gallon.
Analysts expect prices to fall after Enbridge Energy Partners reopens the 670,000-barrel-a-day pipeline later this week. The line was closed last week after it sprang a leak in a Chicago suburb.
A series of mixed economic reports contributed to yesterday's dip in oil prices.
The Mid-Atlantic industrial production report contracted in September for the second straight month, although the Philadelphia Fed manufacturing index improved in August.
The Labor Department said first-time jobless benefits claims fell to a two-month low but still indicate sluggish economic growth.
PFGBest analyst Phil Flynn said there are concerns that demand may be softening as the slowest time of the year for energy products is at hand, between the busy summer driving season and ahead of the winter heating months.
Natural gas prices fell after the government said stockpiles held in underground storage in the lower 48 states increased last week. But they reversed course to end the session higher. Natural gas gained 6.7 cents to settle at US$4.062 per 1,000 cubic feet.
Lind-Waldock senior market strategist Rich Ilczyszyn said he believes more traders are entering the market, hoping that the price of gas will start climbing.
"I really think this market is trying to find a bottom," he said.
Few traders think the two hurricanes in the Atlantic and one off Mexico's Gulf Coast will cause problems for oil and natural gas production and push up prices.
In other Nymex trading in October contracts, heating oil fell 3.36 cents to settle at US$2.0990 a gallon and gasoline fell 3.78 cents to settle at US$1.9247 a gallon.
In London, Brent crude for November delivery dropped 94 cents to settle at US$78.48 a barrel on the ICE Futures exchange.
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