• Thursday, May 23, 2024
businessday logo

BusinessDay

Brent oil falls on slower economy as WTI steady

businessday-icon

Brent crude fell for a third day on concern slower economic growth in Europe will reduce demand. West Texas Intermediate traded near a 16-year low on estimates US crude inventories increased.

German business confidence fell more than analysts forecast in September, the Ifo institute’s business climate index showed.

“The weak German data is obviously pushing down Brent,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “Demand is still a big concern. We have a lot of supply in the US.”

Brent for November settlement fell 47 cents, or 0.5 percent, to $96.38 a barrel at 9:17am New York time on the London-based ICE Futures Europe exchange. Volume was 18 percent below the 100-day average. The European benchmark crude traded at a premium of $4.72 to WTI on ICE.

WTI for November delivery rose 7 cents to $91.63 a barrel on the New York Mercantile Exchange. The volume of all futures traded was about 20 percent below the 100-day average. The contract closed at $91.52 on September 22, the lowest since May 1, 2013.

The Ifo institute’s business climate index, based on a survey of 7,000 executives, fell to 104.7 from 106.3 in August. The index is now at its lowest since April 2013.

“Weak demand, rather than rampant supply growth, is currently the Achilles heel of the market,” Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd., said in a report. The American Petroleum Institute reported that crude inventories dropped 6.5 million barrels, according to Bain Energy.

US crude inventories increased 3.67 million barrels in the week ended September 12, the EIA said last week. That’s the first gain in four weeks.