By Timothy Puko
Oil prices slid to new lows Monday, including Brent crude's
first move below $100 a barrel in more than a year, on concern that
demand won't rise fast enough to absorb new supply.
Oil markets have been in decline since mid-June, with booming
production, primarily in the U.S., outweighing worries that crises
in the Middle East and Eastern Europe could disrupt supply
distribution. Now traders are concerned demand won't keep up, with
data from the world's top oil consumers--the U.S. and
China--suggesting their economies aren't growing as quickly as some
had hoped.
On Monday, the oil markets focused on August trade data out of
China, showing its total imports declined for the second straight
month. China's oil-import growth is slowing, limiting its power to
lift the world market, according to analysts at Citigroup Inc.
The news followed slower-than-expected U.S. jobs growth in data
released Friday.
"The economic malaise hanging over the market seems to be
driving us lower," said Gene McGillian, a broker and analyst at
Tradition Energy.
The Japanese economy is also contracting and there is lingering
uncertainty from the U.K., where Scottish voters could vote for
independence next week, said Matt Smith, an analyst at consultant
Schneider Electric SA in Louisville, Ky.
Brent crude, the global oil benchmark, dropped $1.12, or 1.1%,
to $99.70 a barrel on the ICE Futures Europe exchange. In early
trade, Brent fell to $99.36 a barrel, the lowest since May 2013.
Light, sweet crude for October delivery was down $1.25, or 1.3%, to
$92.04 a barrel on the New York Mercantile Exchange, the lowest
price since January.
The impulse to sell has grown for weeks as traders have watched
producers shift their activity further out on the futures curve,
said Michael Doyle, a broker at Eclipse International Inc. in New
York. That is a sign that producers see supply coming on strong
without demand to take it, so they are trying to delay their risk,
he said.
The overarching concern is that the supply-demand dynamic isn't
balanced so the selling will continue, Mr. Doyle said.
"People use all that jobs data as another indication there's
softening of demand," he said. "To them, that's just a confirmation
of what they've already seen for the past three weeks."
Front-month October reformulated gasoline blendstock, or RBOB,
was down 4.15 cents, or 1.6%, to $2.5419 a gallon. The contract
fell to $2.5371 a gallon in midmorning trade, the lowest since Nov.
8, 2013. October diesel lost 2.35 cents, or 0.8%, to $2.7975 a
gallon.
Write to Timothy Puko at tim.puko @wsj.com
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