Oil Ends At Six-Week Low As Demand Worries Weigh
NEW York (Dow Jones Newswires), Dec. 15, 2011
Oil futures pushed lower Thursday, ending at their weakest level in six weeks, as worries about global oil demand sent prices spiraling for a second session.
Light, sweet crude for January delivery settled down $1.08, or 1.1%, to $93.87 a barrel on the New York Mercantile Exchange. That marks the contract's lowest settlement since Nov. 2.
The move is the second straight downward session for Nymex crude, which is off 6% over the last two days in a broad retreat driven by worries about Europe's debt crisis and weak crude demand in the U.S.
January Brent crude on the ICE futures exchange settled up 7 cents, or 0.1%, to $105.09 a barrel. With the January contract expiring at the close of trading, the more heavily traded February contract recently traded down 64 cents, or 0.6%, at $103.26.
Crude began the day in positive territory, following a string of good U.S. economic reports. Jobless claims fell 19,000 last week to a seasonally adjusted 366,000, their lowest level since May 2008, the Labor Department said Thursday. A semiannual outlook from the Institute for Supply Management said manufacturers and nonmanufacturers see the U.S. recovery continuing in 2012.
The developments helped vault crude as high as $95.99 a barrel in intraday trading. However, futures reversed course midway through the session, as worries about Europe's sovereign debt crisis and U.S. crude-oil demand remained in focus.
"The bounce never found any traction an it just slowly slipped as the day went on," said Tom Bentz, a director at BNP Paribas Prime Brokerage Inc. in New York.
Equities also pared their gains through the afternoon. The Dow Jones Industrial Average recently rose 0.6% to 11889.8, off its intraday high of 11,967.8.
Market watchers said government data released Wednesday that showed falling U.S. oil demand continue to weigh on the market for a second straight day. The Department of Energy said oil demand fell by 1.8 million barrels last week. Oil imports fell 1.1 million barrels a day.
Meanwhile, International Monetary Fund head Christine Lagarde said at a Washington conference that the global economic outlook remains "quite gloomy."
Oil traders have been closely following economic headlines this year, amid worries that the sluggish recovery is weakening demand for oil. Developments out of Europe and the U.S. have whipsawed prices above and below $100 a barrel several times this year, as traders weigh the economy's ability to withstand high oil prices.
Several market participants say the recent rally above $100 wasn't sustainable given the still-fragile recovery.
"I think it's going to go lower," said Mark Waggoner, president of Excel Futures, a commodities trading firm. "I think we're headed for $89 a barrel. A couple days ago when I said that people laughed, but the market's way overdone."
Front-month January reformulated gasoline blendstock, or RBOB, settled down 1.6 cents, or 0.6%, to $2.4877 a gallon. January heating oil settled down 0.74 cent, or 0.3%, to $2.8225 a gallon.
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