Crude oil fell for third day, the longest losing streak for a month, on speculation slower global economic growth is curbing fuel consumption. Crude has plunged more than $13 from last week's record $147.27 on falling U.S. gasoline purchases. Economic growth in China, the world's second-largest oil user, was the slowest since 2005 in the second quarter. Plans for renewed diplomatic contacts between the U.S. and Iran eased concern a conflict will cut supplies from the Middle East's second-largest producer.
`` The demand picture is clearly demonstrating that current high prices are slowing both industrial and personal usage,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``Geopolitical worries are receding especially in U.S. and Iranian relations.''
Crude oil for August delivery fell as much as $1.20, or 0.9 percent, to $133.40 in electronic trading on the New York Mercantile Exchange. The contract traded at $134.08 at 10:19 a.m. London time.
Prices have dropped 7.7 percent in the past three days, the biggest three-day decline since March. Oil fell as low as $132 a barrel yesterday, more than 10 percent below the record $147.27 reached on July 11. A drop of that magnitude is commonly referred to as a correction.
Prices fell yesterday after the Energy Department reported an unexpected increase in U.S. stockpiles and a drop in monthly gasoline demand. Consumption of motor fuel in the U.S. averaged 9.3 million barrels a day over the past four weeks, down 2.1 percent from the same period last year, an Energy Department supply report showed.
Nuclear Negotiations
Prices also fell as plans by a high-ranking American diplomat to take part in nuclear negotiations with Iran tempered speculation that the U.S. or Israel may attack OPEC's second- biggest oil producer in a dispute over its nuclear program. Concern about a possible attack helped push oil prices to a record last week.
Undersecretary of State William Burns will participate in the European Union-Iran talks this weekend in Geneva, State Department spokesman Sean McCormack said yesterday without giving details. This is a shift in the U.S. position on talks with a government it has shunned since 1980.
The U.S. will announce in the next month plans to establish a diplomatic presence in Tehran, the U.K.'s Guardian newspaper reported today, without citing anyone. The Bush administration intends to set up a U.S. interests section in Tehran staffed by American diplomats almost 30 years after severing ties with Iran, the London-based newspaper said.
China Slowdown
Brent crude oil for September delivery traded at $135.84 a barrel, down 35 cents, on London's ICE Futures Europe exchange at 9:46 a.m. local time. Yesterday it declined $4.05, or 2.9 percent, to $135.81 a barrel.
China's economic expansion cooled to the slowest pace since 2005 as gross domestic product grew 10.1 percent in the second quarter from a year earlier, down from 10.6 percent in the first, the statistics bureau said today in Beijing.
Gasoline for August delivery was at $3.2650 a gallon in New York, down 1.44 cents, at 9:14 a.m. London time. Futures reached $3.631 a gallon on July 11, an all-time high.
``U.S. drivers continue to curb travel whenever possible with retail gasoline prices above $4 a gallon,'' Harry Tchilinguirian, a senior oil market analyst at BNP Paribas SA in London, said in a report. ``Prospects for the U.S. economy and gasoline demand go hand in hand.''
Confidence in the global economy deteriorated this month from Asia to the U.S. as oil prices rose to a record and the financial crisis deepened, a survey of Bloomberg users on six continents showed. The Bloomberg Professional Global Confidence Index fell to 10.3 from 21 in June, the lowest reading since the survey began in November.
`` The demand picture is clearly demonstrating that current high prices are slowing both industrial and personal usage,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``Geopolitical worries are receding especially in U.S. and Iranian relations.''
Crude oil for August delivery fell as much as $1.20, or 0.9 percent, to $133.40 in electronic trading on the New York Mercantile Exchange. The contract traded at $134.08 at 10:19 a.m. London time.
Prices have dropped 7.7 percent in the past three days, the biggest three-day decline since March. Oil fell as low as $132 a barrel yesterday, more than 10 percent below the record $147.27 reached on July 11. A drop of that magnitude is commonly referred to as a correction.
Prices fell yesterday after the Energy Department reported an unexpected increase in U.S. stockpiles and a drop in monthly gasoline demand. Consumption of motor fuel in the U.S. averaged 9.3 million barrels a day over the past four weeks, down 2.1 percent from the same period last year, an Energy Department supply report showed.
Nuclear Negotiations
Prices also fell as plans by a high-ranking American diplomat to take part in nuclear negotiations with Iran tempered speculation that the U.S. or Israel may attack OPEC's second- biggest oil producer in a dispute over its nuclear program. Concern about a possible attack helped push oil prices to a record last week.
Undersecretary of State William Burns will participate in the European Union-Iran talks this weekend in Geneva, State Department spokesman Sean McCormack said yesterday without giving details. This is a shift in the U.S. position on talks with a government it has shunned since 1980.
The U.S. will announce in the next month plans to establish a diplomatic presence in Tehran, the U.K.'s Guardian newspaper reported today, without citing anyone. The Bush administration intends to set up a U.S. interests section in Tehran staffed by American diplomats almost 30 years after severing ties with Iran, the London-based newspaper said.
China Slowdown
Brent crude oil for September delivery traded at $135.84 a barrel, down 35 cents, on London's ICE Futures Europe exchange at 9:46 a.m. local time. Yesterday it declined $4.05, or 2.9 percent, to $135.81 a barrel.
China's economic expansion cooled to the slowest pace since 2005 as gross domestic product grew 10.1 percent in the second quarter from a year earlier, down from 10.6 percent in the first, the statistics bureau said today in Beijing.
Gasoline for August delivery was at $3.2650 a gallon in New York, down 1.44 cents, at 9:14 a.m. London time. Futures reached $3.631 a gallon on July 11, an all-time high.
``U.S. drivers continue to curb travel whenever possible with retail gasoline prices above $4 a gallon,'' Harry Tchilinguirian, a senior oil market analyst at BNP Paribas SA in London, said in a report. ``Prospects for the U.S. economy and gasoline demand go hand in hand.''
Confidence in the global economy deteriorated this month from Asia to the U.S. as oil prices rose to a record and the financial crisis deepened, a survey of Bloomberg users on six continents showed. The Bloomberg Professional Global Confidence Index fell to 10.3 from 21 in June, the lowest reading since the survey began in November.
Source: Bloomberg|by Alexander Kwiatkowski and Nesa Subrahmaniyan
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