BLBG:Crude Heads for Biggest Weekly Decline in Almost 2 Months as Markets Slump Q
Oil in New York headed for the biggest weekly decline in almost two months as investors speculated that fuel demand will falter amid a plunge in financial markets and signs of a weakening global economy.
Futures were little changed after sliding 6.3 percent yesterday to a six-week low. Equities fell, pushing the MSCI All-Country World Index of 45 nations into a bear market for the first time in more than two years, after a worsening European debt crisis and threat of a U.S. recession. Goldman Sachs Group Inc. cut its forecast for oil in New York.
Crude oil for November delivery was at $80.55 a barrel, up 2 cents, in electronic trading on the New York Mercantile Exchange at 9:15 a.m. Sydney time. The contract yesterday slid $5.39 to $80.53, the lowest settlement since Aug 9. Prices are 8.3 percent lower this week and down 12 percent this year.
Brent oil for November settlement fell $4.87, or 4.4 percent, to $105.49 a barrel on the London-based ICE Futures Europe exchange yesterday, the lowest since Aug. 9. The European benchmark contract closed at premium of $24.98 to U.S. futures, compared with a record $26.87 on Sept. 6.
Goldman Sachs lowered its three-month forecast for oil in New York by 15 percent to $97.50 a barrel. The bank’s previous target was $115 a barrel, analysts led by Samantha Dart in London said in a report yesterday.
U.S. consumer confidence dropped last week to the weakest point since the recession ended in June 2009, according to the Bloomberg Consumer Comfort Index yesterday. Euro-area services and manufacturing output contracted for the first time in more than two years in September and Chinese manufacturing may shrink for a third month, other reports showed.
Oil options volatility surged to the highest level in six weeks. Implied volatility for at-the-money options expiring in November, a measure of expected price swings in futures and a gauge of options prices, was 51.4 percent at 2 p.m. in New York, the highest level for the contract nearest to expiration since Aug. 10.
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
