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Oil's slide continues, hits 6-week low below US$92
Source: Agencies |
September 20, 2012, Thursday
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OIL prices fell yesterday for the third day in a row as traders realized that a recent run-up to US$100 may have been overdone.
Oil ended at US$91.98 yesterday, dropping US$3.31, or 3.5 percent. That was its lowest close since Aug. 3. Oil has fallen 7 percent this week.
Several things have been pushing prices down. Analysts said traders are taking profits after oil got above US$100 per barrel on Friday for the first time since May. And there have more signs this week that the global economy is slowing down, which tends to push oil prices lower because people and businesses use less energy.
Also, crude inventories rose three times more than analysts had expected last week. Crude supplies grew by 8.5 million barrels to 367.6 million barrels. That's 8.4 percent higher than at the same time last year, according to the Energy Information Administration's weekly report.
Analysts expected a rise of 2.5 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos.
There were also reports that Saudi Arabia is keeping production high to drive oil prices lower.
Oil's decline came despite some news that might have pushed prices higher. The Bank of Japan said yesterday that it would buy more government bonds, which is intended to boost Japan's economy. And ongoing tensions in the Middle East have tended to drive prices higher.
"Yet we continue to fall," said Addison Armstrong, senior director for market research at Tradition Energy. "I think that has accelerated some profit-taking. After all, crude did have a pretty good run from US$86 up to US$100."
Brent crude traded on the ICE Futures exchange in London fell US$3.84, or 3.4 percent, to US$108.19 per barrel.
Traders were also keeping their eyes on oil supplies as US Gulf Coast refineries returned to production after shutting down due to Hurricane Isaac.
"We're getting back a few more refineries post (Hurricane Isaac), but on the flip side a few refineries had some restart issues and a few are headed into maintenance," said Carl Larry of Oil Outlooks and Opinions in a newsletter.
Regular gasoline at the pump fell a half a penny to an average of US$3.854 per gallon.
In other futures trading in New York:
- Wholesale gasoline fell 7 cents US$2.829 per gallon.
- Heating oil slipped 8.3 cents to US$3.044 per gallon.
- Natural gas fell a penny to US$2.762 per 1,000 cubic feet.
Oil ended at US$91.98 yesterday, dropping US$3.31, or 3.5 percent. That was its lowest close since Aug. 3. Oil has fallen 7 percent this week.
Several things have been pushing prices down. Analysts said traders are taking profits after oil got above US$100 per barrel on Friday for the first time since May. And there have more signs this week that the global economy is slowing down, which tends to push oil prices lower because people and businesses use less energy.
Also, crude inventories rose three times more than analysts had expected last week. Crude supplies grew by 8.5 million barrels to 367.6 million barrels. That's 8.4 percent higher than at the same time last year, according to the Energy Information Administration's weekly report.
Analysts expected a rise of 2.5 million barrels, according to Platts, the energy information arm of McGraw-Hill Cos.
There were also reports that Saudi Arabia is keeping production high to drive oil prices lower.
Oil's decline came despite some news that might have pushed prices higher. The Bank of Japan said yesterday that it would buy more government bonds, which is intended to boost Japan's economy. And ongoing tensions in the Middle East have tended to drive prices higher.
"Yet we continue to fall," said Addison Armstrong, senior director for market research at Tradition Energy. "I think that has accelerated some profit-taking. After all, crude did have a pretty good run from US$86 up to US$100."
Brent crude traded on the ICE Futures exchange in London fell US$3.84, or 3.4 percent, to US$108.19 per barrel.
Traders were also keeping their eyes on oil supplies as US Gulf Coast refineries returned to production after shutting down due to Hurricane Isaac.
"We're getting back a few more refineries post (Hurricane Isaac), but on the flip side a few refineries had some restart issues and a few are headed into maintenance," said Carl Larry of Oil Outlooks and Opinions in a newsletter.
Regular gasoline at the pump fell a half a penny to an average of US$3.854 per gallon.
In other futures trading in New York:
- Wholesale gasoline fell 7 cents US$2.829 per gallon.
- Heating oil slipped 8.3 cents to US$3.044 per gallon.
- Natural gas fell a penny to US$2.762 per 1,000 cubic feet.
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