By Nicole Friedman
NEW YORK--U.S. oil prices fell toward the psychologically key
$80 a barrel level Wednesday, then pared some losses, as
disappointing economic data weighed on the well-supplied
market.
Oil futures have plunged for months as global supplies have
increased and demand growth has failed to keep up. Brent, the
global oil benchmark, is down about 25% from its mid-June high.
Both the benchmark global and U.S. oil contracts hit multiyear
lows Tuesday after the International Energy Agency lowered its
forecast for global demand growth this year and next.
On Wednesday, the U.S. benchmark fell as low as $80.01 a barrel
on the New York Mercantile Exchange after U.S. retail sales data
was released. The contract recently traded down 15 cents, or 0.2%,
at $81.69 a barrel.
U.S. retail and food sales fell 0.3% in September from August,
posting the first monthly decline since January. Economists
surveyed by The Wall Street Journal had expected a 0.1%
decrease.
Even though gasoline prices were at four-year lows for the time
of year, sales at gasoline stations fell 0.8% from August and 2.5%
from a year before, indicating that cheaper gasoline didn't spur
increased demand from drivers.
"It's hard to find any speck of bullish sentiment or bullish
news or anything along that line to hang your hat on," said Bob
Yawger, director of the futures division at Mizuho Securities USA
Inc. The retail sales "didn't help," he said.
Brent, the global benchmark, recently traded down 15 cents, or
0.2%, at $84.89 a barrel on ICE Futures Europe.
Traders are concerned that the Organization of the Petroleum
Exporting Countries is unlikely to cut output to raise prices, as
it has in the past. OPEC's next meeting is Nov. 27.
Iran said Tuesday that it is comfortable with current prices,
surprising many market watchers. And Saudi Arabia, the largest OPEC
producer, has sent mixed signals about whether prices are too low
for the country's budgetary needs.
"We feel that a long-term price bottom will likely be
established next month," after OPEC's meeting, said energy-advisory
firm Ritterbusch Associates in a note.
November reformulated gasoline blendstock, or RBOB, recently
rose 0.09 cent to $2.1811 a gallon.
November diesel fell 0.74 cent, or 0.3%, to $2.4648 a
gallon.
Write to Nicole Friedman at nicole.friedman@wsj.com
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