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Oil falls below $93 on Europe, US economic news

The Associated Press

5/15/2013

NEW YORK — The price of oil fell below $93 on Wednesday after disappointing economic reports from Europe and the U.S.

By late morning in New York, benchmark oil for June delivery was down $1.78 to $92.41 a barrel. That marks five straight days of declines after oil rose above $96 last week.

New figures released Wednesday showed the eurozone's economy continued to contract in the first quarter, keeping it in recession for a sixth consecutive quarter. And a report in the U.S. showed factories cut back sharply on production in April, suggesting economic growth may be slowing this spring.

That added to the pressure on oil prices seen Tuesday after the International Energy Agency raised its forecast for U.S. oil production while cutting its prediction for global crude demand.

The dreary economic news is overshadowing the latest data from the Energy Department showing that oil supplies declined unexpectedly last week.

Crude supplies declined by 600,000 barrels, or 0.2 percent, to 394.9 million barrels, in the week ended May 10. Analysts expected an increase of 300,000 barrels. Still, demand for gasoline and distillates such as diesel remain below year-ago levels.

Meanwhile, traders were monitoring news that the EU has launched an investigation into possible price-fixing on the oil markets. Three oil companies, Britain's BP, Royal Dutch Shell and Norway's Statoil, as well as Platts, a division of McGraw Hill Financial which compiles prices for energy markets, confirmed they were being investigated.

The EU, which did not name the targets of its investigation, said oil companies "may have colluded in reporting distorted prices."

"Even small distortions of assessed prices may have a huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales, potentially harming final consumers," the EU said.

Brent crude, a benchmark for many international oil varieties, was down $1.32 to $101.17 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

— Wholesale gasoline fell 5 centx to $2.79 a gallon.

— Heating oil lost 4 cents to $2.83 a gallon.

— Natural gas added 2 cents to $4.05 per 1,000 cubic feet.

 

Pablo Gorondi in Budapest and Pamela Sampson in Bangkok contributed to this report.

 

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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