BLBG: Oil Falls a Third Day on Concern Slow Recovery Will Hurt Demand
July 16 (Bloomberg) -- Crude oil fell for a third day in New York on speculation that a slower pace of recovery in the U.S. will curtail fuel consumption.
Oil gave up most of this week's gains as manufacturing in New York and Pennsylvania dropped, part of a nationwide decline in factory production of 0.4 percent in June. Reports from the International Energy Agency and the Organization of Petroleum Exporting Countries forecast that this year's demand recovery will continue into 2011.
"We're having a period of mixed signals," Thorbjoern Bak Jensen, an analyst at Global Risk Management in Middelfart, Denmark. "The stimulus packages are running out. But the fundamentals and the financials are still supportive, so I think we could test the $80 mark in a short while."
Crude for August delivery was down 41 cents at $76.21 a barrel on the New York Mercantile Exchange at 1:29 p.m. London time after falling as low as $76.16. Brent crude for September settlement slipped 55 cents to $75.41 on the London-based ICE Futures Europe exchange.
The Federal Reserve Bank of New York reported that its general economic index fell to 5.1 in July from 19.6 the prior month. The Federal Reserve Bank of Philadelphia's general economic index declined to 5.1 this month, the lowest level since August 2009, from 8 in June.
'Slowdown in Growth'
"The economic news is signaling a slowdown in growth," said Victor Shum, a senior principal at Purvin & Gertz Inc. in Singapore. "It's creating a view that oil pricing in the high $70's might be a little stronger than it should be."
Crude may fall next week after government reports signaled that the U.S. economic recovery will slow, reducing fuel demand, a Bloomberg News survey showed.
Thirteen of 33 analysts, or 39 percent, forecast crude oil will decline through July 23. Twelve respondents, or 36 percent, predicted that futures will be little changed and eight saw an increase. Last week, 53 percent of analysts forecast a gain. economies such as China and India.
Worldwide crude oil consumption will increase by 1.05 million barrels a day, or 1.2 percent, next year to average 86.41 million barrels a day, OPEC's Vienna-based secretariat said yesterday in its first assessment for 2011. The Paris-based IEA forecast that oil usage will advance 1.3 million barrels, or 1.6 percent, to 87.8 million a day in 2011.
