Market Close: Oct 07 Down
Oct 7th, 2014 by loren
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Crude-oil futures resumed their slump Tuesday, with the global benchmark ending at its lowest level in two years after the International Monetary Fund cut its outlook for global growth. On the New York Mercantile Exchange, light, sweet crude futures for delivery in November fell $1.49, or 1.7%, to close at $88.85, the lowest finish for a nearby contract since April 2013. November Brent crude on London’s ICE Futures exchange, the more widely used worldwide benchmark, dropped 68 cents, or 0.7%, to end at $92.11 a barrel, the lowest nearby finish since June 2012. Nymex reformulated gasoline blendstock for November — the benchmark gasoline contract– fell 4.49 cents, or 1.9%, to $2.3683 a gallon, the lowest finish since January 25, 2011.
Oil extended an earlier decline as the IMF cut its forecast for 2014 global growth to 3.3% from an earlier estimate of 3.4% and projected a 2015 expansion of 3.8% versus an earlier forecast of 4%. The forecast feeds into concerns about lackluster fundamentals on both sides of the supply-demand equation. “Global crude oil prices continue to fall sharply amid ample supply and weak demand combined with an increasing confidence that turmoil in Iraq is unlikely to disrupt supplies,” analyst Phin Ziebell at National Australia Bank said in a report. He said liquid fuel demand has been subdued for the last several months, which is reflected in higher oil inventories and lower refinery runs, and expects Brent crude to average $103 a barrel in 2015.
U.S. oil markets will be watching initial stockpile data due from the American Petroleum Institute, a trade body, later Tuesday, with expectations of an increase in total crude-oil inventories. The more closely-watched inventory data from the U.S. Energy Information Administration is due on Wednesday, and will help indicate the level of U.S. oil demand.