Oil prices dip with consumers leery over economy
Oil prices fell Tuesday on a new report suggesting that consumers remain unsure about the economy’s direction and one day before the government releases data expected to show a build up in crude supplies.
Benchmark crude for November delivery fell 33 cents $66.51 on the New York Mercantile Exchange.
Crude has doubled in price since February, pulled higher by a six-month rally on Wall Street and a battered dollar. The U.S. currency is near its lowest point in the past year against the euro, and that makes dollar-based crude cheaper.
But in the past two weeks, oil has given up about $6 a barrel as supplies continue to build and demand remains woeful, though the number of miles driven by Americans is on the upswing.
Unemployment is at a 26-year high and figures to get worse when unemployment data for September is released on Friday. The government said Tuesday that consumer confidence fell unexpectedly in September.
That has kept energy prices in check and PFGBest analyst Phil Flynn said prices are going to have to fall further or crude and gasoline supplies will continue to grow.
On Wednesday the Energy Information Administration releases its weekly supply report, which is expected to show crude placed into storage grew by more than 2 millions barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Burgeoning supplies have sent retail gas prices to two-month lows. After falling below $2.50 a gallon on Monday for the first time since July, the average price for gasoline fell another 1.2 cents overnight to $2.487 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service.
In other Nymex trading, gasoline for October delivery fell less than a penny to $1.6335 a gallon, and heating oil rose by about the same amount to $1.6915 a gallon. Natural gas rose 6 cents to $4.891 per 1,000 cubic feet.
In London, Brent crude rose 2 cents to $65.56 the ICE Futures exchange.