BLBG:Oil Drops From Three-Day High as U.S. Equities Decline, Stockpiles to Rise
Oil dropped from a three-day high in New York as investors bet that increasing stockpiles and signs of a slowing U.S. economy indicate fuel demand will falter in the world’s biggest crude-consuming nation.
Futures slipped as much as 0.4 percent today after most U.S. equities fell. An Energy Department report tomorrow may show crude inventories rose 1.5 million barrels in the seven days ended Aug. 19, climbing for a second week. London-traded Brent declined yesterday on speculation that Libyan production may recover after rebels entered the capital city of Tripoli in a push to force out Muammar Qaddafi.
Crude for October delivery fell as much as 33 cents to $84.09 a barrel in electronic trading on the New York Mercantile Exchange, and was at $84.29 at 8:59 a.m. Sydney time. The contract yesterday gained $2.01, or 2.4 percent, to $84.42, the highest since Aug. 17. The September future expired yesterday.
Brent oil for October settlement dropped 26 cents to $108.36 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract settled at a premium of $23.94 to U.S. futures, compared with a record settlement of $26.21 on Aug. 19.
The Libyan revolt, which began in February, has reduced the availability of light, sweet crude, or oil with low density and sulfur content. The country’s output fell to 100,000 barrels a day last month, a Bloomberg News survey showed. That’s less than 10 percent of the 1.59 million barrels the nation pumped in January, before the uprising.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
