BLBG:Crude Trades Near Seven-Day Low on Signs of Economic Slowdown, Debt Crises
Oil traded near the lowest in seven days in New York as investors speculated that fuel demand may falter amid signs of slowing global economic growth in Asia and debt crises in the U.S. and Europe.
Futures were little changed today and down 5 percent since climbing to a five-month high on Nov. 16. Japan, the world’s third-biggest crude consumer, reported the first decline in exports in three months and Singapore said economic growth may slow next year. Spain replaced its government in elections, while a U.S. committee may say today it failed to agree on cutting the federal budget deficit. The oil market is balanced, according to Saudi Arabian Oil Minister Ali Al-Naimi.
“The market got ahead of itself a little too quickly,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney. “There are still issues in Europe and there appear to be problems with the supercommittee.”
Crude oil for January delivery was at $97.75 a barrel, up 8 cents in electronic trading on the New York Mercantile at 11:05 a.m. Singapore time. Prices are 20 percent higher the past year.
Brent oil for January settlement was at $107.65 a barrel, up 9 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas crude was at $9.90, up from $9.89 on Nov. 18. The spread reached a record $27.88 on Oct. 14.
OPEC, Japan
There is no oversupply in global oil markets, Al-Naimi said yesterday in Riyadh. October oil output in Saudi Arabia, OPEC’s biggest producer of crude, was 9.4 million barrels a day, similar to in September, he said. The Organization of Petroleum Exporting Countries meets Dec. 14 to decide whether to change output quotas.
Japanese exports fell 3.7 percent in October from a year earlier, the Ministry of Finance said today in Tokyo. The median estimate of 29 economists surveyed by Bloomberg News was for a 0.3 percent decline. Singapore’s economy may grow 1 percent to 3 percent in 2012 after expanding 5 percent this year, the nation’s trade ministry said in a statement.
Mariano Rajoy won the biggest parliamentary majority in a Spanish election in almost 30 years and told Spaniards to brace for difficult times as the nation fights to avoid being overwhelmed by the debt crisis.
The U.S. deficit-cutting congressional supercommittee is highly unlikely to salvage talks on at least $1.2 trillion in federal budget savings, a Democratic aide said in an e-mail yesterday. The aide wasn’t authorized to discuss internal matters and declined to be identified.
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
