Microsoft’s latest upgrade is finallyJuly 30, 2015 3:16
Oil Falls, Bernanke’s Speech Eyed
Crude oil future prices inch lower; Concerns over hurricane in the U.S. loom
August 27, 2011 3:22 by p.deleon
Oil prices fell on Friday as
analysts played down expectations of further quantitative easing
ahead of a speech by U.S. Federal Reserve Chairman Ben Bernanke
on the health of the world’s largest economy and top oil
Brent crude futures were 59 cents lower at $110.03 a
barrel as of 1239 GMT. U.S. light crude futures were down
$1.05 cents to $84.25 a barrel.
All eyes were on Bernanke’s speech in Jackson Hole, Wyoming
scheduled for 1400 GMT, with markets eager to hear what the
Fed’s plan is to help a struggling U.S. economy, although the
consensus was that its options are limited.
“Today the focus will be on Ben (Bernanke) and (hurricane)
Irene, and one is as unpredictable as the other,” said
Petromatrix’s Olivier Jakob.
At last year’s meeting, Bernanke hinted at what eventually
became a $600 billion quantitative easing bond-buying
“The key question is whether Bernanke will announce a
further round of quantitative easing of U.S. monetary policy, as
he did last year,” Commerzbank analysts said.
“We do not expect such an announcement, however, and oil
prices could come under pressure as a result. The price rally of
past days was mainly due to the expectation of further
Some price support came from Hurricane Irene as it barrelled
towards U.S. East Coast refineries, posing a potential threat to
supply; while the ongoing conflict in OPEC member Libya and
international pressure on Syria also underpinned sentiment.
But worries about the outlook of the faltering recovery
remained high on the agenda. Deutsche Bank joined a growing
chorus of banks in downgrading oil price forecasts, trimming its
Brent forecast for 2011 to $112 a barrel from $114 a barrel and
U.S. light crude to $94 a barrel from $100.
“We now believe that the economy is likely to grow more
slowly in 2011-2012,” Deutsche Bank’s Adam Sieminski said in a
A Reuters poll of analysts meanwhile showed that oil prices
are likely to stay above $100 a barrel next year despite
increasing downward pressure from the expected return of some
Libyan production and fears of a double-dip recession.
EURO ZONE, HURRICANE
Economic worries on the other side of the Atlantic also kept
investors on edge. The Spanish economy grew at a slower pace in
the second quarter than the first, fuelling concerns Spain could
slip back into recession if the euro zone economy continues to
German consumer sentiment fell slightly going into
September, hitting a 10-month low as the euro zone debt crisis
and fears of another recession in Europe and the United States
weighed on consumer expectations, a survey
Hurricane Irene, a Category 3 storm that lashed the
low-lying Bahamas on Thursday, was expected to hit North
Carolina on Saturday before heading up the coast to New York and
MF Global said in its daily report that it expected
refineries in the path of the hurricane to withstand the winds
from the storm and not shut down for now.
While the East Coast region has no major offshore oil and
gas production like the hurricane-prone Gulf Coast, the stakes
are still high.
The region has around a dozen nuclear plants and a massive
oil delivery hub at New York Harbor. Its pipelines and power
networks serve more than 100 million Americans.
“The biggest issue may be flooding if the storm surge brings
water up into New York Harbor. The harbor imports 400 kb/d in
gasoline,” the MF Global report said.
LIBYA, SYRIA SUPPLIES
In Libya, rebels stormed Tripoli’s Abu Salim district, one
of the main holdouts of forces loyal to Muammar Gaddafi, after a
NATO air strike on a building in the area, a Reuters
The Libyan rebel government hopes to restart oil exports
within two to three months and reach full volumes in about a
year, Ali Tarhouni, the official in charge of financial and oil
matters, told Reuters from Libya’s oil ministry in Tripoli.
Traders said that it had become more difficult to sell
Syrian crude this month in the European spot market due to U.S.
sanctions on Syria and expectations EU sanctions may
But oil major Royal Dutch Shell is planning to continue
exporting Syrian oil in September despite fresh U.S. sanctions
and a looming EU embargo.
(Reporting by Seng Li Peng in Singapore and Zaida Espana in
London; Editing by Jason Neely)