Oil deepens fall, awaits US vote

SINGAPORE – US oil prices fell further below US$50 (N$305) a barrel yesterday adding to a week-long slide that has cut more than US$5 off record-high prices, as some traders cashed in profits ahead of the US presidential election.

Rising US crude oil inventories and production, signs of slowing economic growth and speculation that a victory by Democrat challenger Senator John Kerry could prove bearish for oil all led to a wave of profit-taking that has knocked prices around 10 per cent below last week’s record high US$55,67. US crude oil was 38 cents lower at US$49,75 a barrel, after dropping US$1,63 on Monday, when prices dipped below US$50 for the first time in a month.Brent crude was down 39 cents at US$46,67 a barrel after sliding almost US$2,00 on Monday.Short-term forecasts for warmer-than-usual weather in the eastern United States also encouraged some selling, traders said, as it would give refiners more time to top up very low heating oil inventories before demand peaks with the onset of winter.Some energy analysts said a win for the challenger Kerry in yesterday’s US presidential election could mean lower crude prices than if President George W.Bush were re-elected.Latest opinion polls can barely separate the two.”Kerry is bearish in a number of ways,” said David Thurtell at Commonwealth Bank of Australia in Sydney.Kerry says he would halt plans to fill the US strategic petroleum reserve (SPR) at high prices to keep more crude on the market, providing more slack for tight global supplies.The Massachusetts senator is also seen more likely to push energy conservation measures and alternative fuel sources, curbing demand from the world’s biggest consumer, which accounts for nearly one in four barrels used worldwide.Some analysts say a Bush win could stoke nervousness about US policies in the oil-producing Middle East, while Kerry is seen as more likely to work through diplomatic channels.Oil prices have also been hit by signs of slowing growth or disappointing economic indicators in the US, China and Europe, giving speculators an excuse to tuck away profits from a nearly unbroken US$13 rally since September.Global manufacturing growth slowed in October due to high prices, leading indices show, while US third-quarter gross domestic product expanded by less than expected.Saboteurs blew up three pipelines in northern Iraq on Monday, halting exports to Turkey and local refineries, oil officials said.Iraqi crude oil stored at the Mediterranean port of Ceyhan will allow tanker liftings to continue.-Nampa-ReutersUS crude oil was 38 cents lower at US$49,75 a barrel, after dropping US$1,63 on Monday, when prices dipped below US$50 for the first time in a month.Brent crude was down 39 cents at US$46,67 a barrel after sliding almost US$2,00 on Monday.Short-term forecasts for warmer-than-usual weather in the eastern United States also encouraged some selling, traders said, as it would give refiners more time to top up very low heating oil inventories before demand peaks with the onset of winter.Some energy analysts said a win for the challenger Kerry in yesterday’s US presidential election could mean lower crude prices than if President George W.Bush were re-elected.Latest opinion polls can barely separate the two.”Kerry is bearish in a number of ways,” said David Thurtell at Commonwealth Bank of Australia in Sydney.Kerry says he would halt plans to fill the US strategic petroleum reserve (SPR) at high prices to keep more crude on the market, providing more slack for tight global supplies.The Massachusetts senator is also seen more likely to push energy conservation measures and alternative fuel sources, curbing demand from the world’s biggest consumer, which accounts for nearly one in four barrels used worldwide.Some analysts say a Bush win could stoke nervousness about US policies in the oil-producing Middle East, while Kerry is seen as more likely to work through diplomatic channels.Oil prices have also been hit by signs of slowing growth or disappointing economic indicators in the US, China and Europe, giving speculators an excuse to tuck away profits from a nearly unbroken US$13 rally since September.Global manufacturing growth slowed in October due to high prices, leading indices show, while US third-quarter gross domestic product expanded by less than expected.Saboteurs blew up three pipelines in northern Iraq on Monday, halting exports to Turkey and local refineries, oil officials said.Iraqi crude oil stored at the Mediterranean port of Ceyhan will allow tanker liftings to continue.-Nampa-Reuters