BLBG:Oil Falls From Three-Week High as Economic Concern Counters U.S. Outlook
Oil fell from the highest settlement in three weeks, trimming a weekly gain, as concern that Europe’s debt crisis will worsen and curb global commodity demand countered signs of an economic recovery in the U.S.
West Texas Intermediate futures declined as much as 0.5 percent, snapping the longest winning streak since December. Greece won’t receive financial aid until it implements an austerity plan, according to Luxembourg Prime Minister Jean- Claude Juncker. China’s exports fell for the first time in more than two years and OPEC cut its forecast for oil demand. U.S. applications for jobless benefits slid by 15,000 to 358,000 in the week ended Feb. 4, data from the Labor Department showed.
“WTI has no direction at the moment, it’s stabilizing at current levels,” said Ken Hasegawa, a commodity-derivative sales manager at Newedge Group in Tokyo. “If Brent comes under selling pressure, then WTI will be pulled down to $98.50.”
Oil for March delivery fell as much as 46 cents to $99.38 a barrel in electronic trading on the New York Mercantile Exchange and was at $99.43 at 2:36 p.m. Sydney time. The contract rose a third day yesterday, climbing 1.1 percent to $99.84 for the highest close since Jan. 19. Prices are up 1.6 percent this week and 15 percent higher the past year.
Brent oil for March settlement slid 43 cents to $118.16 a barrel on the ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded WTI was at $18.73, compared with $18.75 yesterday.
Economic Slowdown
European finance ministers refused to deliver a bailout for Greece after the nation’s government said yesterday that it agreed austerity measures with political parties, reflecting the prospect that politicians may backtrack on commitments not passed into law. Greek Finance Minister Evangelos Venizelos said the parliamentary vote set to begin this weekend amounted to a referendum on euro membership.
China’s exports fell 0.5 percent in January as trade was disrupted by the Lunar New Year Holiday and weaker demand from Europe. Imports dropped 15.3 percent. China accounted for 11 percent of the world’s oil demand while European Union countries consumed 16 percent, according to BP Plc’s Statistical Review of World Energy.
The Organization of Petroleum Exporting Countries reduced its estimate of crude consumption for this year by 120,000 barrels a day to 88.76 million a day, the group’s Vienna-based secretariat said in its monthly market report yesterday. Supply from the 12 members increased to 30.9 million barrels a day last month, the most since October 2008, compared with estimated requirements of 29.55 million, the report showed.
Oil in New York may rise next week after U.S. refineries increased operating rates, bolstering demand for crude, a Bloomberg News survey showed. Nineteen of 36 analysts, or 53 percent, forecast prices will climb through Feb. 17. Eight respondents, or 22 percent, predicted futures will decline and nine estimated there will be little change. It was the most bullish response since April.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
