Oil falls in Europe as world growth outlook dims
A string of indicators that the global economy is struggling to escape its mire kept oil prices on their down trend Monday.
By early afternoon in Europe, benchmark crude for November delivery was down $1.31 to $88.57 a barrel in electronic trading on the New York Mercantile Exchange.
Oil fell more than 2 percent Friday as traders fret that jobs aren’t growing fast enough in the U.S. to significantly boost demand for fuel. The contract closed down $1.83 to $89.88 per barrel.
In London, Brent crude, which is used to price international varieties of oil, was down 91 cents to $111.11 a barrel.
The widening spread between the Nymex and Brent contracts, now above $22, was attributed to higher U.S. output and supply risks in Europe and the Middle East.
Analysts at Commerzbank in Frankfurt said U.S. oil production was at its highest level since December 1996, while concerns about the spread of the Syrian conflict to neighboring countries and delays in shipments of North Sea oil were keeping a floor under Brent prices.
The U.S. economy created 114,000 jobs in September, in line with what economists had expected but not an indication of strong jobs growth. The U.S. Labor Department said the unemployment rate fell to 7.8 percent, the first time it’s been below 8 percent in nearly four years.
In a new sign of a weak global economy, the World Bank cut the growth outlook for developing Asia-Pacific economies for 2012 to 7.2 percent from its May forecast of 7.6 percent. The bank cited weak global demand due to the lackluster U.S. recovery and Europe’s recession.
The bank also cut its forecast for China, the region’s biggest economy, to 7.7 percent from May’s 8.2 percent.
Oil jumped 4 percent on Thursday following a 4 percent decline on Wednesday. Traders have been trying to gauge the strength of global oil demand while also watching developments surrounding Syria for any signs of a disruption in supplies from the Middle East.
Among other energy futures traded in New York:
— Natural gas fell 2.3 cents to $3.373 per 1,000 cubic feet.
— Heating oil fell 1.79 cents to $3.138 per gallon.
— Wholesale gasoline fell 1.82 cents to $2.9342 per gallon.
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