Oil declined in New York, heading for a second weekly loss, as a rescue plan for Europe’s debt-laden economies seems to be faltering in particular with Greece, while a worse forecast retail sales indicated concerns that the U.S. economy is slowing.
Brent crude surged to its lowest in a week. European officials are outlining a rescue plan that may include deeper investor losses on Greek bonds, higher bank capital levels and increased firepower for bailouts and the International Monetary Fund.
The talk of recession is quieter, as a forecast Brent will average $98 a barrel in the fourth quarter, the oil market itself has grown surprisingly tight. Inventories are very low, at least in Europe, as supplies are not coming back fast enough and, despite all the talk of slowdown, demand seems to be holding up.
Crude for November delivery dropped to $86.48 a barrel in electronic trading on the New York Mercantile Exchange.
Brent oil for November settlement dropped to $109.40 a barrel on the London-based ICE Futures Europe exchange. The European benchmark future, which expires today, reached a record premium of $27.73 a barrel to U.S. crude earlier today. The more-active December contract was up $2.26 at $111.46.
16/10/2011
Recession
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