WSJ: OIL FUTURES Crude Prices Slip After German ZEW Survey
By Paddy Gourlay Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Oil futures slipped Tuesday morning after a survey found expectations for Germany's economy fell sharply in September, pushing the euro lower against the dollar.
Prices were little changed in the morning session until 1000 GMT, when the ZEW economic research institute said its economic expectations index fell to -4.3 in September, its lowest level since February 2009.
Other figures showed industrial production in the 16 countries that use the euro rose at a slower year-on-year pace in July than in June.
At 1020 GMT, the second-month November Brent contract on London's ICE futures exchange is 30 cents lower at $78.77 a barrel. October Brent expires Wednesday, and liquidity is shifting to the second-month contract where around 41,000 lots have traded so far, double the volume of the first month.
The front-month October light, sweet crude contract on the New York Mercantile Exchange, called West Texas intermediate, is trading 42 cents lower at $76.77 a barrel. Trade is thin in the front-month U.S. crude contract with around 19,500 lots changing hands so far.
Concerns also seemed to be easing about the impact of a leak in the Enbridge pipeline which transports Canadian crude into the U.S. Midwest, and Cushing, Okla., the delivery point for WTI contracts.
Although the pipeline remains shut for repairs, the October/November WTI timespread was trading around minus 92 cents Tuesday morning, wider by around eight cents, which should encourage traders to store barrels in Cushing.
The American Petroleum Institute, a trade body, will release weekly U.S. oil inventory statistics later Tuesday, but the figures reflect data for the week ended Sept. 10, only a day after Enbridge was closed. The more influential U.S. Department of Energy figures will be published at 1430 GMT Wednesday. Crude oil inventories are expected to fall by 2.6 million barrels, according to the mean of six analysts' forecasts.
"The stock numbers for the Midwest will be closely watched for the calculation of how many days can the U.S. Midwest stay without [Enbridge] line 6A before becoming a tight market," said Olivier Jakob, an analyst at Petromatrix.
Meanwhile, the biggest hurricane of the season so far, called Igor, is moving westwards across the south Atlantic towards the Caribbean, with a second storm, called Julia, taking shape behind it, but neither are expected to disrupt the oil producing Gulf of Mexico region.
The ICE's gasoil contract for October delivery is $3.50 lower at $670.75 a metric ton, while Nymex gasoline for October delivery is 1.31 cents lower at 196.75 cents a gallon.