CBS: Oil below $85 ahead of Bernanke speech, Irene
(AP) PARIS — Oil prices fell slightly below $85 a barrel Friday as traders waited to see if a hurricane barreling up the U.S. East Coast would affect production and if the Federal Reserve chairman would deliver new stimulus for the economy.
Ben Bernanke gives a major policy speech in Jackson Hole, Wyoming, later in the day and oil's lackluster performance may reflect that investors don't expect the Fed to do much to boost the economy — and thus demand for oil.
Prices could be pushed up by Hurricane Irene, which was already raising wave heights and bringing rain to the shores of North Carolina.
But with the full force of the storm still a day away, benchmark oil for October delivery was down $1.12 to $84.18 in the afternoon European time in electronic trading on the New York Mercantile Exchange. Crude rose 14 cents to finish at $85.30 on Thursday.
In London, Brent crude for October delivery was down 80 cents to $109.82 on the ICE Futures exchange.
Oil has traded near $85 most of this week as investors speculated whether Bernanke will announce any monetary stimulus measures to help boost lending and economic growth. Analysts expect oil would jump if Bernanke signals the Fed plans another round of Treasury bond purchases, known as quantitative easing.
"Markets were seen in waiting mode, but hopes for the speech strewing breadcrumbs for Quantitative Easing-III seemed to be slowly evaporating from markets yesterday, following questions raised on how much ammunition the U.S. has left to spur growth," the JBC Energy Research Center said in a report.
Traders will also be eyeing possible revisions to second quarter U.S. gross domestic product and the latest consumer sentiment data.
Hurricane Irene could push crude prices higher if it disrupts refineries in Delaware, New Jersey, Pennsylvania and Virginia, which produce nearly 8 percent of U.S. gasoline and diesel fuel.
Irene is forecast to affect a broad area, from North Carolina to Canada. It was already sustaining winds of 110 mph (175 kph), but was expected to make landfall Saturday with more force. The storm destroyed hundreds of homes on small Bahamian islands Thursday, and some forecasters think Irene could be the worst hurricane to hit the U.S. Northeast in 50 years.
In other Nymex trading for October contracts, heating oil fell 2 cents to $2.97 per gallon and gasoline futures were down 3 cents at $2.94 per gallon. Natural gas for September delivery added 1 cent to $3.92 per 1,000 cubic feet.
