Sept. 6 (Bloomberg) -- Oil traded near the lowest close in two weeks in New York while London’s Brent gave up earlier gains as investors bet that signs of a slowing global economy indicate fuel demand may falter.
Futures slipped as much as 3.8 percent from their Sept. 2 settlement before a report today may show U.S. service industries grew at the slowest pace in more than a year. A satellite survey signaled rising crude stockpiles in the world’s biggest consumer of the commodity. Brent prices swung between gains and losses after Al Jazeera said Libyan rebels reached an agreement for the surrender of Bani Walid, one of the holdouts of military loyal to Muammar Qaddafi.
“Oil benchmarks slipped again as fears of slowing global growth weighed on demand sentiment,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note today. “Expect further selling pressure this week as markets remain jittery.”
West Texas Intermediate crude for October delivery was at $83.58 a barrel in electronic trading on the New York Mercantile Exchange at 2:32 p.m. in Singapore. That was down $2.87, or 3.3 percent from Sept. 2. Floor trading was shut yesterday for the Labor Day holiday and electronic trades will be booked with today’s transactions for settlement purposes. The contract is headed for its lowest close since Aug. 19.
Brent traded at $110.18 a barrel, up 10 cents, on the London-based ICE Futures Europe exchange after climbing as much as 0.9 percent. The European benchmark crude was at a premium of $26.56 a barrel to WTI, compared with a record intraday spread of $26.97 on Sept. 2.
Crude stockpiles held in floating-roof tanks at Cushing, Oklahoma, the delivery point for WTI oil, rose 2.4 percent on Sept. 1 from Aug. 31, satellite images taken by Longmont, Colorado-based DigitalGlobe Inc. showed. Inventories climbed 850,000 barrels to 35.6 million. The Energy Department said last week that supplies, including floating and fixed tanks, totaled 33.1 million barrels as of Aug. 26.
The Energy Department is scheduled to release its weekly stockpile report on Sept. 8, a day late because of the Labor Day holiday.
U.S. oil has slumped 27 percent from this year’s high of $114.83 on May 2 amid concern that a slowdown in world growth will curb demand. The Institute for Supply Management’s non- manufacturing index fell to 51 last month, the lowest since January 2010, from 52.7 in July, according to the median of 59 forecasts in a Bloomberg News survey.
Fighting in Libya, which began in February, has reduced the availability of light, sweet crude, or oil with low density and sulfur content. The country’s output fell to 45,000 barrels a day last month, according to Bloomberg estimates, compared with 1.6 million barrels the nation pumped in January.
--Editors: Paul Gordon, Alexander Kwiatkowski
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