WSJ:OIL FUTURES: Nymex Crude Falls, But Asian Shares Lend Support
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--U.S. oil futures fell in Asia Wednesday, tracking weakness in the euro as global risk sentiment took a hit after Slovakia's government lost a confidence vote on a crucial expansion of the euro zone's bailout fund, but were off their lows as Asian shares lent support.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $85.49 a barrel at 0628 GMT, down $0.32 in the Globex electronic session. November Brent crude on London's ICE Futures exchange rose $0.04 to $110.77 a barrel.
The euro was at $1.3625 compared with $1.3640 late Tuesday in New York.
Slovakia's failure to approve an expansion of the European Financial Stability Facility raised questions over Europe's ability to handle the region's debt crisis as well as the health of the global economy, hurting the outlook for oil demand.
"Risk sentiment has improved this month and a recovery in global equities from September lows suggests that investors are slowly regaining confidence in Europe's financial health. However, nothing has been resolved with Europe's debt crisis and oil prices will continue to track the euro's moves in the near term," said a trader at Hyundai Oilbank in Seoul.
Still, market participants said resilience in regional stock markets and Japan's better-than-expected August core machinery orders offered some support, with the U.S. oil benchmark making a strong recovery from its intraday low of $84.52 a barrel. The European oil contract managed to bounce from a low of $110.90 a barrel hit earlier in the session.
"I am pretty sure most growth-sensitive assets like metals and oil will fall prey to negative headlines about Europe's debt issues," said a trader at GS Caltex in Singapore. However, any signs of a pick-up in risk appetite and a recovery in global industrial activity will lend plenty of support as well, he said.
Data from Japan's Cabinet Office showed the country's core machinery orders were up 11% in August from the previous month. In July, orders fell by 8.2%.
Nymex reformulated gasoline blendstock for November--the benchmark gasoline contract--rose 34 points to $2.7510 a gallon, while November heating oil traded at $2.9042, 1 point higher.
ICE gasoil for October changed hands at $917.75 a metric ton, up $5.75 from Tuesday's settlement.
-By Ga-Woon Philip Vahn, Dow Jones Newswires; +65-64154149; philip.vahn@dowjones.com
