West Texas Intermediate fell from a two-year high as the prospect of imminent attacks on Syria receded and as better-than-expected U.S. economic data raised speculation that the Federal Reserve will taper its stimulus.
Prices dropped as much as 1.4 percent as the U.K. and France said they favor waiting for the results of a United Nations investigation into Syria’s alleged use of chemical weapons.
The U.S. economy expanded at a faster pace in the second quarter and first-time jobless claims fell more than forecast last week, raising speculation the Fed will reduce its $85 billion monthly bond buying in September.
“Oil is taking out some of the immediate attack-risk premium in the market,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “The market is recalibrating when that attack may happen.
The U.S. economy is getting better and that increases the odds of a September tapering.” WTI for October delivery declined 71 cents, or 0.6 percent, to $109.39 a barrel at 10:15 a.m. on the New York Mercantile Exchange.
The volume of all futures traded was 20 percent below the 100-day average for the time of day. The contract climbed to $110.10 yesterday, the highest close since May 3, 2011. Prices are up 4.2 percent this month.
Brent for October settlement slipped 54 cents, or 0.5 percent, to $116.07 a barrel on the London-based ICE Futures Europe exchange, slipping from the highest close since Feb. 19. Trading was 20 percent above the 100-day average.The European benchmark’s premium to WTI widened for a fourth day, to $6.68 a barrel.
Backing Away
British Prime Minister David Cameron is backing away from a bid to win fast parliamentary approval for attacks on President Bashar al-Assad’s military capacity. France said action requires proof, pointing to a report due within days by UN inspectors probing the site of last week’s chemical attack near Damascus.
The U.S., which is leading the push to punish Assad and says it has evidence that his government was responsible, won’t act without allies, Defense Secretary Chuck Hagel said today.
Crude surpassed $110 yesterday on concern the conflict in Syria may spread and threaten oil supplies from the Middle East.
“The idea that nothing is going to occur imminently is pushing prices down,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC.
“It takes a while for these countries to get their act together.”
Iraq, Iran
Syria borders Iraq and is near Iran, countries that together hold almost a fifth of the output capacity from the Organization of Petroleum Exporting Countries, Bloomberg estimates show.
Syria produced less than 1 percent of the 28.3 million barrels a day pumped in the Middle East last year, according to BP Plc (BP/)’s Statistical Review of World Energy.
The Middle East accounted for 35 percent of global oil production in the first quarter of this year, International Energy Agency data showed.
U.S. gross domestic product rose at a 2.5 percent annualized rate in the second quarter, up from an initial estimate of 1.7 percent, Commerce Department figures showed today.
The median forecast of 79 economists surveyed by Bloomberg projected a 2.2 percent gain. Jobless claims in the week ended Aug. 24 dropped 6,000 to 331,000 from a revised 337,000 the week before that was higher than initially reported, the Labor Department said.
The median forecast of 50 economists surveyed by Bloomberg called for a drop to 332,000. Minutes of a July Fed meeting published Aug. 21 show that most central bank members were “broadly comfortable” with a plan to trim stimulus in 2013.
About 65 percent of economists surveyed by Bloomberg Aug. 9-13 anticipated tapering in September. “With a GDP number like that, is the likelihood of a slight reduction clear in September?” Finlon said.“I think so.”
The Bloomberg U.S. Dollar Index gained as much as 0.5 percent. A stronger dollar reduces oil’s investment appeal.
bloomberg.com
Prices dropped as much as 1.4 percent as the U.K. and France said they favor waiting for the results of a United Nations investigation into Syria’s alleged use of chemical weapons.
The U.S. economy expanded at a faster pace in the second quarter and first-time jobless claims fell more than forecast last week, raising speculation the Fed will reduce its $85 billion monthly bond buying in September.
“Oil is taking out some of the immediate attack-risk premium in the market,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “The market is recalibrating when that attack may happen.
The U.S. economy is getting better and that increases the odds of a September tapering.” WTI for October delivery declined 71 cents, or 0.6 percent, to $109.39 a barrel at 10:15 a.m. on the New York Mercantile Exchange.
The volume of all futures traded was 20 percent below the 100-day average for the time of day. The contract climbed to $110.10 yesterday, the highest close since May 3, 2011. Prices are up 4.2 percent this month.
Brent for October settlement slipped 54 cents, or 0.5 percent, to $116.07 a barrel on the London-based ICE Futures Europe exchange, slipping from the highest close since Feb. 19. Trading was 20 percent above the 100-day average.The European benchmark’s premium to WTI widened for a fourth day, to $6.68 a barrel.
Backing Away
British Prime Minister David Cameron is backing away from a bid to win fast parliamentary approval for attacks on President Bashar al-Assad’s military capacity. France said action requires proof, pointing to a report due within days by UN inspectors probing the site of last week’s chemical attack near Damascus.
The U.S., which is leading the push to punish Assad and says it has evidence that his government was responsible, won’t act without allies, Defense Secretary Chuck Hagel said today.
Crude surpassed $110 yesterday on concern the conflict in Syria may spread and threaten oil supplies from the Middle East.
“The idea that nothing is going to occur imminently is pushing prices down,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC.
“It takes a while for these countries to get their act together.”
Iraq, Iran
Syria borders Iraq and is near Iran, countries that together hold almost a fifth of the output capacity from the Organization of Petroleum Exporting Countries, Bloomberg estimates show.
Syria produced less than 1 percent of the 28.3 million barrels a day pumped in the Middle East last year, according to BP Plc (BP/)’s Statistical Review of World Energy.
The Middle East accounted for 35 percent of global oil production in the first quarter of this year, International Energy Agency data showed.
U.S. gross domestic product rose at a 2.5 percent annualized rate in the second quarter, up from an initial estimate of 1.7 percent, Commerce Department figures showed today.
The median forecast of 79 economists surveyed by Bloomberg projected a 2.2 percent gain. Jobless claims in the week ended Aug. 24 dropped 6,000 to 331,000 from a revised 337,000 the week before that was higher than initially reported, the Labor Department said.
The median forecast of 50 economists surveyed by Bloomberg called for a drop to 332,000. Minutes of a July Fed meeting published Aug. 21 show that most central bank members were “broadly comfortable” with a plan to trim stimulus in 2013.
About 65 percent of economists surveyed by Bloomberg Aug. 9-13 anticipated tapering in September. “With a GDP number like that, is the likelihood of a slight reduction clear in September?” Finlon said.“I think so.”
The Bloomberg U.S. Dollar Index gained as much as 0.5 percent. A stronger dollar reduces oil’s investment appeal.
bloomberg.com
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