Oil falls below $ 77 after report on reserves
The benchmark crude for December delivery lost $ 2.34 to close at $ 76.94 a barrel on the New York Mercantile Exchange.
The Energy Information Administration said in its weekly report that crude and gasoline stocks rose more than expected last week, even though many oil companies have shut down some refineries for the decrease in fuel consumption.
The report said that refineries have reduced their production to the lowest levels since September 2008 and are now importing almost 15% less oil than last year.
Peter Beutel, analyst at Cameron Hanover, said that brokers were disappointed by the low power consumption.
We've been waiting since March to carry the bag rise to a better economy and therefore more demand for oil, and have not seen that yet, Beutel said. We really needed that job numbers start to rise again.
For much of the year, crude prices have risen despite the low demand. Between March and October doubled as the dollar weakened and investors using commodities as a safe haven for their money.
There are oil refineries that are buying the most of these oil contracts, said Tom Kloza, president and chief oil analyst of Price Information Service Oil. They are financial companies … and other people who are patient enough to wait for prices to rise.
Rising oil prices could jeopardize a modest increase demand and the recovery of the global economy, warned the International Energy Agency. In a report released Thursday, the agency asked how much oil the United States really needs.
It seems that the economy #39; real #39, American, as opposed to the financial sector suffers to recover, despite the end of the recession, he said.
The IEA said global demand for crude will average 84.6 million bpd in 2009, a 1.7% or 1.5 million barrels less than last year. In October, the agency predicted in 2009 an average of 84.4 million barrels a day.
Gasoline prices have fallen to consumers throughout the month and the national average stood at 2, $ 65 per gallon (3.79 liters), according to the National Motorists Association, Wright Express and the Information Service.
In other trading on the Nymex, heating oil fell 6.48 cents to $ 1.991 per gallon. Gasoline for December delivery fell 5.22 cents to end at $ 1.9405 a gallon and natural gas for the same month fell 13.3 cents to $ 4.37 per 1,000 cubic feet.
In London, Brent North Sea for December delivery fell $ 1.93 to close at $ 76.02 on the ICE futures market.
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Journalists from The Associated Press Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.