Oil heads for weekly de­cline

The Pak Banker - - Front Page -

NEW YORK

Oil headed for the fourth weekly de­cline in five in New York as signs of a slow­ing econ­omy in the U.S., the world’s big­gest crude user, coun­tered con­cern that ten­sion in the Mid­dle East may dis­rupt sup­plies.

West Texas In­ter­me­di­ate fu­tures were lit­tle changed af­ter fall­ing 1 per­cent yes­ter­day as a re­port showed U.S. un­em­ploy­ment claims climbed at the high­est level since April 2011. Crude stock­piles climbed last week to the high­est since July as out­put rose to an 18-year high, ac­cord­ing to the En­ergy Depart­ment. Oil pared losses af­ter Is­rael said it’s ready to es­ca­late mil­i­tary op­er­a­tions against Gaza.

“Sup­plies are over­whelm­ing while de­mand is non-ex­is­tent,” said An­drey Kryuchenkov, an an­a­lyst at VTB Cap­i­tal, who pre­dicts WTI may slip to $84 a bar­rel this month. “Geopo­lit­i­cal risks are hope­fully go­ing to sub­side, and so ul­ti­mately macroe­co­nomic and de­mand con­cerns will still dom­i­nate the agenda.”

Crude for De­cem­ber de­liv­ery, which ex­pires to­day, rose 5 cents to $85.50 a bar­rel in elec­tronic trad­ing on the New York Mer­can­tile Ex­change at 8:43 a.m. Lon­don time. The Jan­uary con­tract gained 6 cents to $85.93. The front-month fu­ture dropped 87 cents yes­ter­day to $85.45 and is down 0.7 per­cent this week. Prices have lost 14 per­cent this year. Brent for Jan­uary set­tle­ment on the Lon­don-based ICE Fu­tures Europe ex­change in­creased 24 cents to $108.25 a bar­rel. The front-month Euro­pean bench­mark grade was at pre­mium of $22.33 to the cor­re­spond­ing WTI con­tract, from $25.53 yes­ter­day.

Oil in New York re­mains in a down­trend chan­nel on the daily chart, sig­nal­ing price ad­vances may not be sus­tain­able, com­piled by Bloomberg show. Fu­tures have traded be­tween the mid­dle and lower Bollinger Bands for al­most two months. These in­di­ca­tors, rep­re­sent­ing tech­ni­cal re­sis­tance and sup­port lev­els re­spec­tively, are around $87.80 and $82.30 a bar­rel to­day.

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