US crude plunges $3.45 on foreseen lower demand

13 November 2007 20:53  [Source: ICIS news]

HOUSTON (ICIS news)--US West Texas Intermediate (WTI) crude oil for December delivery closed at $91.17/bbl on Tuesday, down $3.45 after the International Energy Agency (IEA) trimmed its forecast for world demand growth.

An IEA report predicted lower energy demand for 2007 and 2008 as a result of the oil shock. At the same time, a separate forecast for a relatively mild US winter also contributed to the sell-off.

The crude futures December option contracts on the NYMEX expired at the end of Tuesday’s session and, after a recent attempt to lift the price of front-month WTI towards $100.00 failed, the market’s momentum switched to the downside as market speculators liquidated positions of length.

During the session, WTI established a high of $94.10/bbl but plunged to $90.15/bbl before staging a late session rebound which managed to wipe $1.00 off the losses.

ICE Brent for December delivery also came off under selling pressure and settled at $88.83/bbl, down $3.15 on the session.

Heating oil contracts slipped 8.00cents/gal to close at $2.50/gal. Gasoline reformulated blending for oxygenated blendstock (RBOB) also fell sharply, losing 9.98cents/gal to close at $2.32/gal.

By: Ignacio Sotolongo
+1 713 525 2653

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