Crude falls to near US$103 a barrel amid US budget battle, cut in IMF forecast
Oct 9, 2013 / 2:50 pm
The price of oil dipped Wednesday amid ongoing concerns about the U.S. budget standoff and a day after the International Monetary Fund lowered its forecast for global growth through the end of next year.
By early afternoon in Europe, benchmark West Texas Intermediate crude for November delivery was down 24 cents to US$103.25 a barrel in electronic trading on the New York Mercantile Exchange. The contract had risen 46 cents to settle at US$103.49 on the Nymex on Tuesday.
On Tuesday, the Washington-based International Monetary Fund said it was cutting its global economic growth forecasts for 2013-14, primarily due to slowing growth in China, India, Brazil and other developing countries.
Michael Hewson, an analyst at CMC Markets, said in an email commentary that oil prices "remain capped somewhat by concerns that a slowdown in emerging markets could well weigh on demand."
The IMF also warned that the U.S. would harm the world economy if it fails to raise its borrowing limit. If Congress doesn't raise the limit on the amount of money the country can borrow by Oct. 17, the U.S. could face an unprecedented default on its debts.
Oil prices have bounced around between US$101 and US$104 a barrel after the U.S. government was forced to partially halt operations last week. The shutdown occurred when Congress failed to agree on short-term funding past the end of the fiscal year on Sept. 30.
"Markets have been struggling for direction in recent sessions as the U.S. government shutdown pushes investors to the sidelines," said a report from Sucden Financial Research in London.
Ample oil supplies and the impact of a strengthening dollar were also keeping oil prices down.
The industry-funded American Petroleum Institute said late Tuesday that U.S. crude stocks expanded by 2.8 million barrels last week, while analysts polled by Platts, the energy information arm of McGraw-Hill Cos., had been expecting a build of 2.2 million barrels.
The report from the Energy Department's Energy Information Administration â€” the market benchmark â€” will be out later Wednesday.
As well, the U.S. dollar has recovered somewhat after recent losses. A stronger dollar makes commodities like crude oil priced in dollars more expensive and a less enticing investment for traders dealing in other currencies.
Brent, the benchmark for international crudes, was down 35 cents to US$109.81 on the ICE Futures exchange in London.
In other energy futures trading on Nymex, wholesale gasoline rose 0.56 of a cent to US$2.6362 a U.S. gallon (3.79 litres), heating oil fell 0.47 of a cent to US$3.0278 a gallon and natural gas lost 0.5 of a cent to $3.711 per 1,000 cubic feet.
(TSX:ECA), (TSX:IMO), (TSX:SU), (TSX:HSE), (NYSE:BP), (NYSE:COP), (NYSE:XOM), (NYSE:CVX), (TSX:CNQ), (TSX:TLM), (TSX:COS.UN), (TSX:CVE)
Read more Business News
|QHR Technologies Inc||1.11||+0.05|
|Anavex Life Sciences||0.34||-0.055|
|Copper Mountain Mining||1.55||+0.08|
Opportunities to Be Aware of This Year As the 2013 year is coming to an end, individuals should be mindful of year-end tax planning opportunities that will need to be implemented prior to December 31s...
When was the last time you thought about your mortgage? Most people take out a mortgage with their bank for five years and then forget about it. When you took out that mortgage did anyone discuss ot...
Recently, people have been asking me about my recent Stand Up Paddle adventure around the entire Okanagan Lake. Here is an excerpt from an article I wrote with a link at the end to the complete artic...
- Netflix sets Season 2 release of 'House of Cards' on Feb. 14
- US stocks waver as investors try to guess when the Fed will pull back on stimulus; Sears drops
- Study compares tech habits of Canadian boomers versus Gen Y and Z consumers
- US service sector expands at weaker pace in November as sales, orders and hiring slow.
- Survey: CEOs more optimistic about US economy, hiring and sales in the next 6 months
- US new-home sales jump in October to seasonally adjusted annual rate of 444,000
- Board changes expected at Barrick should boost investor sentiment
- Survey: US businesses add 215,000 jobs in November, the most in 12 months
- Descartes reports record Q3 revenue, net income falls, following acquisition
- Three years in the making, Canada's anti-spam law coming into force next year
- Rogers snaps up naming rights to future downtown home of Edmonton Oilers
- Sun Media cutting 200 jobs across the company including about 50 from editorial