Business

Published: Friday November 13, 2009 MYT 7:29:00 AM
Updated: Friday November 13, 2009 MYT 12:49:00 PM

Oil lingers below US$77 in Asia Friday(update)


SINGAPORE: Oil prices lingered below US$77 a barrel Friday in Asia amid investor doubts about U.S. crude demand.

Benchmark crude for December delivery, which earlier fell to as low as $76.00, was down 15 cents to $76.79 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

The contract gave up $2.34 to settle at $76.94 on Thursday.

The U.S. Energy Information Administration said Thursday in its weekly report that oil inventories rose 1.8 million barrels and gasoline stocks grew 2.5 million, both larger-than-expected increases.

Oil has bobbed between $76 and $82 for the last month as traders mull how much a high U.S. unemployment rate, which rose to 10.2 percent in October, will drag on consumer demand for crude products such as gasoline.

"I don't think demand will pick up until the economy starts creating jobs," said Clarence Chu, a trader at market maker Hudson Capital Energy in Singapore.

Last month, crude broke through a $65-$75 range that it had been in for most of the summer on signs the economy was recovering. Some analysts expect crude to stay above that range going into 2010.

"The immediate floor to prices has been moving up, beyond $70 per barrel and perhaps as high as $75 per barrel," Barclays Capital said in a report.

"Market dynamics have returned to being a fairly relaxed chess game."

In other Nymex trading, heating oil fell 0.90 cent to $1.98 a gallon. Gasoline for December delivery dropped 0.54 cent to $1.94 a gallon.

Natural gas for December delivery was steady at $4.38 per 1,000 cubic feet.

In London, Brent crude for December delivery fell 12 cents to $75.90 on the ICE Futures exchange. - AP

Earlier report

Oil drops to below US$77

NEW YORK: Oil prices tumbled Thursday, dropping below $77 a barrel after the government reported that petroleum supplies continue to grow as American drivers and businesses cut way back on energy use.

Benchmark crude for December delivery gave up $2.34 to settle at $76.94 a barrel on the New York Mercantile Exchange.

The Energy Information Administration said in its weekly report that oil and gas supplies grew more than expected last week, even though many oil companies have shuttered refineries as fuel consumption slumps.

The government report said refineries have slowed production to the lowest levels since September 2008, and they're importing nearly 15 percent less crude than last year.

Peter Beutel, an analyst at Cameron Hanover, said traders are increasingly disappointed by the lack of consumption.

"We've been waiting since March for a rising stock market to lead to a better economy and then more oil demand, and we just haven't seen it yet," Beutel said.

"You really need employment numbers to start going back up."

For most of the year, oil prices increased despite tepid consumer demand.

Prices doubled from March to October as the dollar weakened and investors looked to crude and other commodities as relatively safe places to put their money.

A weaker dollar also helps investors holding strong international currencies buy oil contracts.

"It's not the oil refineries who are buying most of these oil contracts," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

"It's the financial companies, the ETFs, and other people who are patient enough to sit and wait for prices to go up."

As oil prices soared, they tugged gas and diesel prices higher, boosting fuel costs for everyone.

The International Energy Agency warned Thursday that any economic recovery could suffer if energy prices continue to rise.

In a report released Thursday, the agency questioned how much more oil the U.S. actually needs.

"It would seem that the 'real' U.S. economy, as opposed to the financial one, is struggling to recover, despite the end of the recession," the IEA said.

The IEA increased slightly its forecast for global oil demand to 84.8 million barrels a day in 2009, 1.7 percent or 1.5 million barrels less than last year.

In October, the agency's forecast for 2009 was of 84.4 million barrels a day.

At the pump, gas prices have slid all month, dropping less than a penny overnight to a new national average of $2.65 a gallon, according to AAA, Wright Express and Oil Price Information Service.

A gallon of regular unleaded is 17.2 cents more expensive than it was last month and 44.8 cents more than a year ago.

In other Nymex trading, heating oil lost 6.48 cents to settle at $1.991 a gallon. Gasoline for December delivery gave up 5.22 cents to settle at $1.9405 a gallon.

Natural gas for December delivery fell 13.3 cents to settle at $4.37 per 1,000 cubic feet.

In London, Brent crude for December delivery fell $1.93 to settle at $76.02 on the ICE Futures exchange. - AP


Latest NYSE, NASDAQ and other business news, from AP-Wire


For latest Bursa Malaysia indices, charts and other information click here

New York Stock Exchange:
http://www.nyse.com

Nasdaq Stock Market:
http://www.nasdaq.com


For Tokyo Stock Exchange click here

  • E-mail this story
  • Print this story