US crude falls $1.46 on low demand, strong dollar

04 September 2008 21:21  [Source: ICIS news]

HOUSTON (ICIS news)--NYMEX light sweet crude futures for October delivery settled at $107.89/bbl, down $1.46 versus Wednesday’s close, after bouncing off intra-day lows in response to supply statistics.

The Energy Information Administration’s (EIA) data, which was released a day later due to the Labor Day holiday, revealed a contrary-to-forecast drawdown in crude stocks but was countered by a smaller than expected drawdown in gasoline inventories.

During the past month, total demand for products such as gasoline and distillates was noted declining 3.5% over a year ago. In world markets, the US dollar continued its upward trend versus key currencies.

At least 13 refineries in the Gulf Coast region remain down due to lingering effects from Hurricane Gustav. The market expects supplies of refined products to decline during the next few weeks as a result of the loss of production, and this could support prices going forward.

October crude established an overnight high of $110.60/bbl but reversed direction and plunged to $106.52/bbl before rebounding after the release of the EIA stats.

ICE Brent for October delivery fell to $105.16/bbl and settled at $106.30/bbl, down $1.76.

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By: Ignacio Sotolongo
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