Oil futures gave up earlier gains and settled lower today as concerns about the economy overrode forecasts that OPEC oil shipments were falling.
In particular, energy investors were shaken by today's Conference Board report that its index of leading indicators dropped 0.4 percent in November to the lowest level in more than two years, said James Cordier, president of Liberty Trading Group in Tampa, Fla. Declines in the index tend to precede economic slowdowns or recessions.
"That is basically fulfilling what people are fearing," Cordier said.
Energy traders worry that a slowing economy will mean reduced demand for oil and gasoline.
Earlier in the day prices jumped $1 a barrel after Dow Jones Newswires reported that Oil Movements, a British tanker tracking firm, said it expects crude shipments from Organization of the Petroleum Exporting Countries will fall by 230,000 barrels a day to 24.2 million barrels a day during the four weeks ending Jan. 5. The report reversed earlier Oil Movements forecasts that predicted oil shipments would rise.
Low pre-holiday trading volumes exacerbated the price moves, analysts said.
Light, sweet crude for February delivery fell 18 cents to settle at $91.06 on the New York Mercantile Exchange.
At the pump, meanwhile, gas prices fell 0.5 cent overnight to a national average of $2.985 a gallon, according to AAA and the Oil Price Information Service. Gas prices have mostly fallen since peaking at over $3.11 a gallon in mid-November as oil prices approached $100 a barrel.
Roy Mason, head of Oil Movements, said the drop-off in crude shipments was normal for this time of year. But the news was enough to give temporary direction to a market that had fluctuated between gains and losses earlier in the day as traders weighed forecasts for a warmer winter — which could lower demand for heating and crude oil — against data suggesting supplies are falling.
In particular, energy investors were shaken by today's Conference Board report that its index of leading indicators dropped 0.4 percent in November to the lowest level in more than two years, said James Cordier, president of Liberty Trading Group in Tampa, Fla. Declines in the index tend to precede economic slowdowns or recessions.
"That is basically fulfilling what people are fearing," Cordier said.
Energy traders worry that a slowing economy will mean reduced demand for oil and gasoline.
Earlier in the day prices jumped $1 a barrel after Dow Jones Newswires reported that Oil Movements, a British tanker tracking firm, said it expects crude shipments from Organization of the Petroleum Exporting Countries will fall by 230,000 barrels a day to 24.2 million barrels a day during the four weeks ending Jan. 5. The report reversed earlier Oil Movements forecasts that predicted oil shipments would rise.
Low pre-holiday trading volumes exacerbated the price moves, analysts said.
Light, sweet crude for February delivery fell 18 cents to settle at $91.06 on the New York Mercantile Exchange.
At the pump, meanwhile, gas prices fell 0.5 cent overnight to a national average of $2.985 a gallon, according to AAA and the Oil Price Information Service. Gas prices have mostly fallen since peaking at over $3.11 a gallon in mid-November as oil prices approached $100 a barrel.
Roy Mason, head of Oil Movements, said the drop-off in crude shipments was normal for this time of year. But the news was enough to give temporary direction to a market that had fluctuated between gains and losses earlier in the day as traders weighed forecasts for a warmer winter — which could lower demand for heating and crude oil — against data suggesting supplies are falling.
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The National Oceanic and Atmospheric Administration said today that the beginning of winter will be warmer than normal in the eastern two-thirds of the nation, which includes the heating oil-dependent Northeast, Dow Jones Newswires reported.
Warmer weather could mean lower demand for heating oil and natural gas.
On the other hand, the government on Wednesday reported that supplies of heating and crude oil fell sharply last week. Heating oil supplies are nearly 30 percent below five-year average levels, said
"We have a struggle with supplies," Cordier said.
January heating oil fell 0.84 cent to settle at $2.5895 a gallon on the Nymex, while January gasoline futures fell 0.43 cent to settle at $2.3276 a gallon.
January natural gas futures fell 4.2 cents to settle at $7.137 per 1,000 cubic feet on the Nymex after the government reported that inventories fell last week by 121 billion cubic feet, less than analysts had expected.
In London, February Brent crude futures fell 60 cents to settle at $90.88 a barrel on the ICE Futures exchange.
Via: Associated Press
Warmer weather could mean lower demand for heating oil and natural gas.
On the other hand, the government on Wednesday reported that supplies of heating and crude oil fell sharply last week. Heating oil supplies are nearly 30 percent below five-year average levels, said
"We have a struggle with supplies," Cordier said.
January heating oil fell 0.84 cent to settle at $2.5895 a gallon on the Nymex, while January gasoline futures fell 0.43 cent to settle at $2.3276 a gallon.
January natural gas futures fell 4.2 cents to settle at $7.137 per 1,000 cubic feet on the Nymex after the government reported that inventories fell last week by 121 billion cubic feet, less than analysts had expected.
In London, February Brent crude futures fell 60 cents to settle at $90.88 a barrel on the ICE Futures exchange.
Via: Associated Press
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