Oil Drops 2 percent On Supply Concerns
NEW YORK (AP) — The price of oil sank 2 percent Tuesday, hitting a five-month low, as the market anticipated another increase in domestic supplies.
Benchmark U.S. crude for December delivery fell $2.10, or 2.2 percent, to close at $93.04 a barrel in on the New York Mercantile Exchange. Oil has dropped about 9 percent in the past month. Investors also sold other riskier assets like gold, down 1.3 percent, and U.S. stocks.
Expectations for another increase in U.S. crude supplies weighed on oil.
Data for the week ending Nov. 8 is expected to show an increase of 1.8 million in crude oil stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos. That would mark the eighth straight weekly increase.
Markets also digested reports from the International Energy Agency and the Organization of Petroleum Exporting Countries.
The Paris-based IEA said China and India would turn Asia into the world's main driver of energy demand in coming years, while the United States is expected to be able to meet its energy needs from domestic sources by 2035.
OPEC, headquartered in Vienna and representing some of the world's largest oil exporters, including Saudi Arabia, Venezuela and Nigeria, kept forecasts for demand for its crude this year and next unchanged from a month ago but warned there were still risks to growth.
"Although the global economy continues to improve, the pace of growth remains sluggish and near-term developments will need close monitoring," OPEC said in its monthly report.
In the U.S., the nationwide average for a gallon of gasoline fell another penny to $3.18, according to AAA. The price is down 6 cents from a week ago and down 26 cents from this time last year.
Six states — Arkansas, Kansas, Louisiana, Missouri, Oklahoma and Texas — have average prices below $3 a gallon, and AAA says more states should follow as gas continues to fall through year end.
Brent crude, the international benchmark, slipped 64 cents to $105.54 a barrel on the ICE exchange in London.
In other energy futures trading on Nymex:
- Wholesale gasoline lost 1 cent to $2.59 a gallon.
- Heating oil slipped 4 cents to $2.85 a gallon.
- Natural gas advanced 4 cents to $3.62 per 1,000 cubic feet.
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