By Timothy Puko
Oil prices are hitting new lows, including Brent crude's first
move below $100 in more than a year, on concern that demand won't
rise fast enough to absorb new supply.
Light, sweet crude futures for October delivery dropped $1.38,
or 1.5%, to $91.91 a barrel on the New York Mercantile Exchange.
The global Brent contract was down $1.22, or 1.2%, to $99.60 a
barrel on the ICE Futures Europe exchange.
Chinese imports declined in August for the second straight
month, government officials reported, reigniting concerns about the
global economy, analysts said. Oil imports did actually increase
incrementally, but not enough to excite investors who expect that
growth to slow in the coming months, analysts at Citigroup Inc.
said in a note.
A lot of the reaction is a matter of perception, said Gene
McGillian, a broker and analyst at Tradition Energy. The Chinese
data adds to concern from poor U.S. jobs data that erased gains on
Friday, he said. The Japanese economy is also contracting and there
is lingering uncertainty from the United Kingdom where Scottish
voters look increasingly interested in voting for independence,
noted Matt Smith, an analyst at consultant Schneider Electric SA in
Louisville, Ky.
"The economic malaise hanging over the market seems to be
driving us lower," Mr. McGillian said.
Brent hadn't dipped below $100 a barrel since June 2013. It
traded Monday as low as $99.36 a barrel, the lowest intraday price
since it hit $98.76 on May 1, 2013. It was also the lowest U.S.
price since January.
A potential cease fire in Ukraine is also bearish for crude
prices. But there is still a lot of uncertainty about how Ukraine,
the Scottish referendum and ongoing Middle East turmoil could
affect the price of oil.
"All these events have direct implications for oil demand, oil
supply and oil prices and indirect implications via risk sentiment
and currency movements. We just do not know what they are yet,"
writes David Hufton of brokerage PVM.
Front-month October reformulated gasoline blendstock, or RBOB,
was down 4.15 cents, or 1.6%, to $2.5419 a gallon. October diesel
lost 2.59 cents, or 0.9%, to $2.7933 a gallon.
Cassie Werber contributed to this article.
Write to Timothy Puko at tim.puko @wsj.com
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