Oil Falls A Second Day On European Crisis, U.S. Jobless Claims
Oil fell for a second day amid concern European leaders aren’t making progress on resolving the region’s debt crisis and as reports signaled a weakening economy in the U.S., the world’s biggest crude user.
Futures slid as much as 0.6 percent and headed for the first weekly decline in a month. GermanChancellor Angela Merkel said she and French President Francois Hollande will maintain the pressure on Greece to overhaul its economy at meetings with Prime Minister Antonis Samaras in Berlin today and tomorrow. U.S. unemployment claims rose to the highest level in a month and consumer confidence slid to the lowest since January, reports showed yesterday.
“The meeting between German and French leaders and the Greek prime minister is an event that carries some risk as far as the markets are concerned,” Ric Spooner, a chief market analyst at CMC Markets in Sydney, said in a telephone interview today. “We’ve positioned at a level where the market probably needs further news to take oil higher.”
Oil for October delivery dropped as much as 62 cents to $95.65 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.67 at 1:01 p.m. Singapore time. The contract yesterday fell 1 percent to $96.27, the lowest close since Aug. 20. Prices are down 0.4 percent this week and 3.2 percent this year.
Brent oil for October settlement slid 53 cents, or 0.5 percent, to $114.48 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate was at $18.86, from $18.74 yesterday.
Oil is declining in New York after futures reached technical resistance yesterday along a downward-sloping trend line going back to March 1, according to data compiled by Bloomberg. This line, starting at the 2012 intraday high of $110.55 a barrel, is at $98.48 today. Sell orders tend to be clustered near chart-resistance levels.
Samaras has used interviews this week with German and French newspapers to call for more time to meet targets under its bailout program as European officials look for ways to tame the debt crisis. Greece is dependent upon receiving outside funds to remain in the 17-nation euro area.
Applications for U.S. unemployment benefits rose by 4,000 for a second week to reach 372,000 in the period ended Aug. 18, Labor Department figures showed yesterday in Washington. The Bloomberg Consumer Comfort Index decreased to minus 47.4 in the period ended Aug. 19, the sixth consecutive drop, from minus 44.4 in the prior period. The series of declines is the longest since 2008, when the U.S. was in recession.
The U.S. accounted for 21 percent of the world’s oil consumption last year and the European Union for 16 percent, according to BP Plc (BP/)’s Statistical Review of World Energy.
New York crude may rise next week on speculation the Federal Reserve will boost stimulus and on concern Middle East tension will disrupt supplies, according to a Bloomberg News survey. Twenty-seven of 47 analysts, or 57 percent, forecast oil will increase through Aug. 31. Fifteen respondents, or 32 percent, predicted that futures will fall and five said there will be little change in prices.
Tropical Storm Isaac strengthened in the Caribbean Sea on a path projected to bring rain and heavy winds to the Gulf of Mexico next week and threaten energy facilities. The Gulf is home to 29 percent of U.S. oil production, 6.3 percent of natural-gas output and 40 percent of refining capacity, according to the U.S. Energy Department.
The Organization of Petroleum Exporting Countries will reduce crude shipments this month, according to Oil Movements. OPEC, responsible for about 40 percent of world supplies, will export 23.9 million barrels a day in the four weeks to Sept. 8, compared with 23.94 million a month earlier, the tanker-tracker said yesterday in its weekly e-mailed report. The data exclude Angola and Ecuador.