Oil hovers below $87 amid glum economic outlook
Originally published August 18, 2011 at 1:22 a.m., updated August 18, 2011 at 5:03 a.m.
KUALA LUMPUR, Malaysia (AP) — Oil prices fell below $87 a barrel Thursday in Asia on renewed concerns that the U.S. economy may weaken and hit fuel demand in the world’s top crude consumer.
Benchmark oil for September delivery was down 76 cents to $86.82 a barrel at late afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. Crude rose 93 cents to settle at $87.58 on Wednesday.
In London, Brent crude for October delivery was down 53 cents to $110.05 a barrel on the ICE Futures exchange.
Oil was lower Thursday in line with falls in Asian stock markets, analysts said.
Energy investment consultants Ritterbusch and Associates said oil prices are likely to remain volatile ahead of the release of a slew of U.S. economic data later Thursday including jobless claims, the consumer price index and home sales.
Other analysts said sentiment was also negative after Energy Information Administration data showed crude inventories rose last week.
However, gasoline inventories dropped which suggested improving demand for gasoline, and this indicated refineries will also need more oil, which is used to make gasoline.
In other Nymex trading for September contracts, heating oil was down 0.8 cent at $2.954 a gallon and gasoline futures fell 0.9 cent to $2.731 per gallon. Natural gas slipped 3.2 cents to $3.901 per 1,000 cubic feet.