Oil declined for the first time in four days as Greece struggled to qualify for aid payments and economic data indicated that global demand may weaken.
Futures fell as much as 1.1 percent and the euro dropped against the dollar after Greek Prime Minister Antonis Samaras failed to secure agreement on spending cuts.China’s industrial output rose the least in three years and exports declined.
Oil also slipped as Saudi Arabian Oil Minister Ali al-Naimi said crude prices are higher than fundamentals would indicate.
“The strength of the dollar is sending oil lower,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania.
“We had disappointing economic headlines out of China, which are probably also driving this market.”
Oil for October delivery fell 47 cents, or 0.5 percent, to $95.95 a barrel at 12:34 p.m. on the New York Mercantile Exchange. Prices are down 2.9 percent this year.
Brent for October settlement rose 9 cents to $114.34 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark was at a premium of $18.39 to New York-traded West Texas Intermediate crude, up from $17.83 on Sept. 7.
Samaras is meeting officials from the euro area, the European Central Bank and the International Monetary Fund today after he failed to secure an agreement from his coalition partners on budget reductions required by creditors for a bailout.
Greece needs their approval to receive its next tranche of funds. The euro fell as much as 0.4 percent against the dollar. A stronger dollar reduces the investment appeal of commodities.
Chinese Data
Chinese imports fell 2.6 percent in August from a year earlier as exports rose 2.7 percent, the customs bureau said in Beijing today. Production increased 8.9 percent, the National Bureau of Statistics said yesterday.
Japan’s economy expanded in the second quarter at half the pace the government initially estimated. Gross domestic product grew an annualized 0.7 percent in the three months through June, the Cabinet Office said in Tokyo.
Italy’s economy contracted more than initially reported in the second quarter. GDP shrank 0.8 percent from the previous three months, more than the 0.7 percent first reported by the National Statistics Institute on Aug. 7.
“Oil should move lower this week,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
“There really isn’t the demand out there to support these prices.” Saudi Arabia’s al-Naimi said the kingdom is monitoring prices and always “taking necessary steps to make sure supply is in line with demand and will meet the needs of its customers,” according to a Saudi Press Agency report.
Saudi Aim
Al-Naimi said Saudi Arabia will continue, in cooperation with fellow Gulf Cooperation Council and OPEC member states, to “preserve the stability of the international oil market,” the agency reported. The kingdom is the world’s leading exporter.
Traders are focused on the Federal Reserve, which starts a two-day policy meeting on Sept. 12. The Fed has completed two rounds of asset purchases known as quantitative easing and may implement a third.
“The biggest factor for the oil market this week will probably be the Fed meeting and whether they announce further quantitative easing,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.4 billion.
“If they do, it will have an adverse impact on the dollar and commodities will strengthen.” Germany’s Federal Constitutional Court in Karlsruhe will decide whether to suspend the 500 billion-euro ($639 billion) European Stability Mechanism on Sept. 12.
The court’s decision comes on the same day as Dutch voters decide whether to back parties questioning an expansion of European.
“We have a lot happening the week with the German court decision, the Dutch election and the Fed meeting,” O’Grady said.
bloomberg.com
Futures fell as much as 1.1 percent and the euro dropped against the dollar after Greek Prime Minister Antonis Samaras failed to secure agreement on spending cuts.China’s industrial output rose the least in three years and exports declined.
Oil also slipped as Saudi Arabian Oil Minister Ali al-Naimi said crude prices are higher than fundamentals would indicate.
“The strength of the dollar is sending oil lower,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania.
“We had disappointing economic headlines out of China, which are probably also driving this market.”
Oil for October delivery fell 47 cents, or 0.5 percent, to $95.95 a barrel at 12:34 p.m. on the New York Mercantile Exchange. Prices are down 2.9 percent this year.
Brent for October settlement rose 9 cents to $114.34 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark was at a premium of $18.39 to New York-traded West Texas Intermediate crude, up from $17.83 on Sept. 7.
Samaras is meeting officials from the euro area, the European Central Bank and the International Monetary Fund today after he failed to secure an agreement from his coalition partners on budget reductions required by creditors for a bailout.
Greece needs their approval to receive its next tranche of funds. The euro fell as much as 0.4 percent against the dollar. A stronger dollar reduces the investment appeal of commodities.
Chinese Data
Chinese imports fell 2.6 percent in August from a year earlier as exports rose 2.7 percent, the customs bureau said in Beijing today. Production increased 8.9 percent, the National Bureau of Statistics said yesterday.
Japan’s economy expanded in the second quarter at half the pace the government initially estimated. Gross domestic product grew an annualized 0.7 percent in the three months through June, the Cabinet Office said in Tokyo.
Italy’s economy contracted more than initially reported in the second quarter. GDP shrank 0.8 percent from the previous three months, more than the 0.7 percent first reported by the National Statistics Institute on Aug. 7.
“Oil should move lower this week,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
“There really isn’t the demand out there to support these prices.” Saudi Arabia’s al-Naimi said the kingdom is monitoring prices and always “taking necessary steps to make sure supply is in line with demand and will meet the needs of its customers,” according to a Saudi Press Agency report.
Saudi Aim
Al-Naimi said Saudi Arabia will continue, in cooperation with fellow Gulf Cooperation Council and OPEC member states, to “preserve the stability of the international oil market,” the agency reported. The kingdom is the world’s leading exporter.
Traders are focused on the Federal Reserve, which starts a two-day policy meeting on Sept. 12. The Fed has completed two rounds of asset purchases known as quantitative easing and may implement a third.
“The biggest factor for the oil market this week will probably be the Fed meeting and whether they announce further quantitative easing,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.4 billion.
“If they do, it will have an adverse impact on the dollar and commodities will strengthen.” Germany’s Federal Constitutional Court in Karlsruhe will decide whether to suspend the 500 billion-euro ($639 billion) European Stability Mechanism on Sept. 12.
The court’s decision comes on the same day as Dutch voters decide whether to back parties questioning an expansion of European.
“We have a lot happening the week with the German court decision, the Dutch election and the Fed meeting,” O’Grady said.
bloomberg.com
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