US crude falls $4/bbl to 10-month low

08 October 2008 09:43  [Source: ICIS news]

SINGAPORE (ICIS news)--US crude futures dropped more than $4/bbl on Wednesday to their lowest level since the end of last year amid growing concerns the global financial crisis will dampen demand for oil.

 

At 8:14 GMT, November NYMEX light sweet crude futures were trading at $86.60/bbl, down $3.46/bbl on Tuesday’s settlement level, having earlier hit a low of $86.05/bbl, down $4.01/bbl.

 

At the same time, November Brent on London’s ICE Futures was trading at $81.65/bbl, down $3.01/bbl on Tuesday’s settlement price, having earlier hit a low of $81.00/bbl, down $3.66/bbl.

 

Prices continued to decline despite comments from OPEC members indicating pressure was building in the organisation to introduce supply cuts.

 

Highlighting the threat to global oil demand from the financial crisis, the US Energy Information Administration (EIA) in a report issued on Tuesday cut its forecast for global consumption growth in 2008 to 300,000 bbl/day, which is some 350,00 bbl/day less than its previous  forecast issued one month ago.

 

The EIA said that this adjustment reflected the deteriorating global economic outlook.

 

It said that strong growth in non-OECD countries, especially China, those in Latin America and oil-exporting countries in the Middle East, would be partly offset by sharp declines in US oil consumption as well as lower oil consumption in many other OECD countries.

 

Weekly US supply data from the EIA due out later on Wednesday was expected to reveal a build in crude and gasoline stocks but a drawdown in distillate inventories.

 

Refinery runs were expected to continue to recover from the recent hurricanes.

 

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By: James Dennis
+65 6780 4359

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