BLBG:Crude Oil Falls a Fifth Day as Economic Concerns Counter Stimulus Report
Oil fell for a fifth day in New York as concerns of a slowing economy in the world’s biggest crude- consuming nation countered speculation that the Federal Reserve may start another stimulus program.
Futures are in the longest losing streak in three months. Oil slid yesterday after reports showed U.S. service industries expanded in July at the slowest pace in 17 months and crude stockpiles climbed for a second week. Three former top officials at the Fed said the central bank should consider a new round of securities purchases to bolster economic growth, the Wall Street Journal reported.
“Market participants seem to be concerned about growth prospects in the U.S.,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts crude will average $98 a barrel in the third quarter. Reports of stimulus “may give a short-term reprieve to prices and forecast demand but if these weak numbers keep coming out it’s going to swamp any positive sentiment around further quantitative easing,” he said.
Crude for September delivery declined as much as 41 cents, or 0.5 percent, to $91.52 a barrel in electronic trading on the New York Mercantile Exchange, and was at $91.52 at 1:27 p.m. Singapore time. Prices last fell five days in a row in the period through May 6. Futures gained 0.7 percent earlier today. The contract yesterday tumbled $1.86 to $91.93, the lowest since June 27. Prices are up 11 percent the past year.
Brent oil for September settlement was at $113.15 a barrel, down 8 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract was at a $21.61 premium to U.S. futures, compared with a record close of $22.67 on Aug. 2.
U.S. Stockpiles
U.S. crude inventories last week rose 950,000 barrels to 354.9 million, an Energy Department report showed. Gasoline stockpiles climbed 1.7 million barrels to 215.2 million, the highest level since April 1. They were forecast to increase 250,000 barrels, according to a Bloomberg News survey.
Supplies of distillate fuel, a category that includes heating oil and diesel, increased 409,000 barrels to 152.3 million, the Energy Department report shows. They were forecast to rise 1.5 million barrels, according to the survey.
The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90 percent of the economy, dropped to 52.7 from 53.3 in June. Economists projected 53.5 for July, according to the median forecast in a Bloomberg News survey. Readings above 50 signal expansion.
Employment Data
A Labor Department report today may show initial U.S. jobless claims climbed last week. A report tomorrow may show payrolls increased by 85,000 workers in July after an 18,000 increase in June that was the smallest this year, according to the median forecast of 86 economists surveyed by Bloomberg News.
Tropical Storm Emily stalled for a few hours, pouring rain over the Caribbean island of Hispaniola, and is expected to resume a course that may threaten the U.S. East Coast this weekend, the U.S. National Hurricane Center said.
Emily, with top winds of 50 miles (80 kilometers) per hour, was stationary about 75 miles southeast of Isla Beata, Dominican Republic, according to an advisory posted by the center before 8 p.m. New York time. The center of the storm may move across Haiti and the Dominican Republic today, bringing heavy rain and causing deadly flooding.
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
