Crude sheds $2/bbl as demand concerns resurface

02 October 2008 11:00  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude futures fell more than $2/bbl on Thursday, as traders refocused on demand worries after the US Senate voted in favour of the $700bn rescue package for the financial sector.

At 9:15 GMT on Wednesday, November ICE Brent futures were trading at $93.59/bbl, down $1.74/bbl on Wednesday’s settlement price, having earlier hit a low of $92.53/bbl down $2.80/bbl.

At the same time, November NYMEX light sweet crude futures were trading at $97.16/bbl, down $1.37/bbl on Wednesday’s settlement level, having earlier hit a low of $96.02/bbl, down $2.51/bbl.

Following the US Senate approval of a revised version of the $700bn rescue plan for the financial sector, the bill will go before the House of Representatives, which rejected the original draft of the plan on Monday.

Crude was pressured by worries of declining demand in the US brought on by the economic crisis and the threat of a recession in the world’s biggest economy.

On Wednesday, weekly US supply data from the Energy Information Administration (EIA) revealed a larger than expected build in crude stocks of 4.3m bbl, compared with forecasts of a rise of around 2.4m bbl.

There was also an unexpected build in US gasoline stocks of 900,000 bbl, against an expected fall of around 1.6m bbls. Distillate stocks were down 2.3m bbls against an anticipated fall of 1.2m bbls.

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By: James Dennis
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