Crude drops most in two weeks as investors eschew risky assets
NEW YORK (Bloomberg) -- Oil fell the most in two weeks as crises of confidence in economies across the globe imperiled energy demand.
Futures in New York dropped as much as 1.8% on Wednesday. Emerging-market stocks careened toward bear-market territory while a basket of the most-vulnerable currencies dipped to the lowest in more than a year. The threat to energy demand intensified amid forecasts for expanding crude stockpiles at a key U.S. storage complex.
Oil is falling amid concern that “emerging-market contagion is going to suppress economic growth and limit demand,” said Gene McGillian, manager of market research at Tradition Energy.
The U.S. benchmark crude touched a seven-week high on Tuesday as Tropical Storm Gordon roiled the Gulf of Mexico. Meanwhile, even as sanctions against Iran degraded the Islamic Republic’s ability to help supply global oil markets, OPEC and allied producers were working to finalize a long-term cooperation framework by December, according to the cartel’s secretary-general, Mohammad Barkindo.
West Texas Intermediate for October delivery slid 75 cents to $69.12/bbl at 11:11 a.m. on the New York Mercantile Exchange. Brent for November settlement dipped $1.16 to $77.01/bbl on the ICE Futures Europe exchange.
The global benchmark crude traded at a $8.58 premium to WTI for the same month.
Oil inventories at the biggest U.S. pipeline nexus in Cushing, Oklahoma, rose by an estimated 600,000 bbl last week, according to a Bloomberg survey. The American Petroleum Institute is scheduled to release its weekly count of stockpiles later Wednesday, followed by the U.S. government’s tally on Thursday.
