Nov. 2 (Bloomberg) -- Oil fell in New York for a fourth day, the longest losing streak in three months, on concern a Greek referendum on Europe’s rescue plan will worsen the region’s debt crisis and curb economic growth.
Futures dropped as much as 1.3 percent after Greek Prime Minister George Papandreou pledged to put Europe’s financing package to a vote. Manufacturing in the U.S., the world’s largest oil consumer, was close to stagnating last month, data showed yesterday. U.S. crude stockpiles rose last week, according to a Bloomberg News survey before an Energy Department report today.
“The euro-zone issue remains a key factor driving both financial markets and oil markets,” Victor Shum, a senior principal at Purvin & Gertz Inc., a consultant in Singapore, said by phone. “Economic uncertainties are going to put pressure on oil.”
Oil for December delivery fell as much as $1.22 to $90.97 a barrel in electronic trading on the New York Mercantile Exchange. It was at $91.98 at 2:15 p.m. Singapore time. Yesterday, the contract slid $1, or 1.1 percent, to settle at $92.19. Prices are up 0.6 percent this year.
Brent oil for December settlement on the London-based ICE Futures Europe exchange decreased as much as 94 cents, or 0.9 percent, to $108.60 a barrel. The European benchmark contract was at $17.28 over New York futures, from $16.37 on Oct. 31, the smallest premium since June 28.
Oil has erased most of this year’s gains in New York on speculation global economic growth will falter and curb fuel consumption. Futures climbed 15 percent last year and rallied 78 percent in 2009.
Papandreou told his ministers in Athens a referendum would confirm Greece as a member of the European Union and the euro area. The vote will hinder the next installment of aid funds, Dutch Finance Minister Jan Kees de Jager said. A rejection of the aid plan “would increase the risk of a forced and disorderly sovereign default,” according to Fitch Ratings.
The Institute for Supply Management’s U.S. factory index slid to 50.8 from 51.6 in September, the Tempe, Arizona-based group said yesterday. A reading of 52 was the median forecast of 85 economists polled by Bloomberg News. Fifty is the dividing line between growth and contraction.
U.S. crude inventories probably increased 1 million barrels in the week ended Oct. 28, based on the median estimate of 13 analysts surveyed. Stockpiles fell 156,000 barrels to 339.9 million, the American Petroleum Institute said yesterday. The industry group also reported a 1.1 million-barrel drop in gasoline inventories and a decline of 3.4 million in supplies of distillate fuels.
Oil in New York has technical support at $89.84 a barrel, according to data compiled by Bloomberg. On the weekly chart, that’s the 50 percent Fibonacci retracement of the drop to $32.40 in December 2008 from a record high of $147.27 in July that year. Buy orders tend to be clustered near chart-support levels.
Goldman Sachs Group Inc. today recommended investors take a “long” position on New York oil contracts for December 2012 as crude stockpiles decline at the delivery hub of Cushing, Oklahoma. It also changed its call to buy Brent futures for July 2012, from December 2012 previously.
--Editors: Paul Gordon, Alexander Kwiatkowski
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