Heating Oil Falls as Stocks Slide on U.S., Europe Debt Concerns
November 22, 2011, 1:21 AM ESTBy Barbara Powell
Nov. 21 (Bloomberg) -- Heating oil and gasoline slid as stocks fell on speculation that a deficit impasse will force the U.S. to submit to $1.2 trillion in automatic cuts and that Europe’s debt crisis threatens global economic recovery.
Heating oil fell a fourth straight day and gasoline touched a nine-month low as a debt-reduction panel is expected to say it can’t reach agreement. Deutsche Bank AG Chief Executive Officer Josef Ackermann said Europe needs a “firewall” to prevent its debt crisis from spreading and should increase the size of a rescue fund.
“The overall weakness is due to the equity market,” said Fred Rigolini, vice president of Paramount Options Inc. in New York. “There’s problems with Congress here passing a debt resolution and concerns about Europe.”
December-delivery heating oil fell 5.28 cents, or 1.7 percent, to $2.9797 a gallon at 1:36 p.m. on the New York Mercantile Exchange. Gasoline for December delivery dropped 0.91 cent, or 0.4 percent, to $2.4693 a gallon. Prices touched $2.4527, the lowest since February.
Heating oil, which settled at a six-month high Nov. 11, fell below its 100-day moving average for the first time since Nov. 1.
“The primary worry is what’s going to play out in Europe,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The distillate market is much more sensitive to what’s going to happen with the global economy.”
Deficit Panel
The U.S. deficit-cutting congressional super committee is expected to announce gridlock today on how to achieve at least $1.2 trillion in savings, a Democratic aide said.
Today is the deadline for the Congressional Budget Office to receive input for analyzing how a proposal would affect the deficit, in advance of the panel’s Nov. 23 target for a deal.
Euro leaders must reach “a momentous deal” toward fiscal and political union by mid-January to save the 17-nation bloc, Credit Suisse said in a note to investors.
The Standard & Poor’s 500 Index slid 2.3 percent in New York. The MSCI All-Country World Index of stocks fell 2.5 percent.
“The uncertainty about Europe and the supercommittee drove down the stock market,” said Phil Flynn, vice president of research at PFGBest in Chicago.
Regular gasoline at the pump, averaged nationwide, fell 0.8 cent to $3.351 a gallon yesterday, according to AAA data.
--With assistance from Heidi Przybyla and Kathleen Hunter in Washington, Gregory Viscusi in Paris and Jiyeun Lee in Seoul. Editors: Dan Stets, Charlotte Porter
To contact the reporter on this story: Barbara J Powell in Dallas at bpowell4@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
