Oil Hovers Around 8-Month Lows Near $80

Gas PricesBy PABLO GORONDI

Oil prices hovered around 8-month lows near $80 a barrel Thursday after the U.S. central bank balked at implementing vigorous stimulus measures to boost waning economic growth and U.S. crude stockpiles rose unexpectedly.

By early afternoon in Europe, benchmark oil for August delivery was down 92 cents to $80.53 a barrel in electronic trading on the New York Mercantile Exchange.

Earlier in the session, the contract dropped to $79.92, the lowest since October. On Wednesday, it fell $2.90 to settle at $81.45.

In London, Brent crude for August delivery was down $1.13 at $91.56 per barrel on the ICE Futures exchange.

The Federal Reserve on Wednesday extended an interest-rate reduction program known as Operation Twist, pledging to sell $267 billion of short-term Treasury bonds and buy longer-term Treasurys through December. However, traders had been hoping for a more aggressive stimulus package known as quantitative easing.

"Bears are on the cusp of smashing through the $80 level," energy trader and consultant The Schork Group said in a report. Schork said the benchmark U.S. crude could fall to $74 and Brent to $82.

A surprising jump in U.S. crude supplies also weighed on crude prices. The Energy Information Administration said oil supplies grew by 2.9 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a decrease of 600,000 barrels.

"The inventory data ... was sobering," said analysts at Commerzbank in Frankfurt, noting that U.S. crude oil stocks had reached their highest level in nearly 22 years. "Given that refinery utilization is close to a 5-year high, one would really have expected to see an inventory reduction. That this was not the case was due to significantly higher crude oil imports and increased U.S. oil production."

Crude has plunged about 25 percent from $106 early last month amid signs of slowing economic growth in the U.S., Europe and China. However, some analysts say investors are too pessimistic about global crude demand prospects.

"Oil prices at current levels are too low and a more a reflection of risk aversion rather than any significant unwinding in demand," National Australia Bank said in a report.

In other energy trading, heating oil was down 0.71 cent at $2.5775 per gallon while gasoline futures fell 2.59 cents at $2.4814 per gallon. Natural gas gained 5.1 cents at $2.568 per 1,000 cubic feet.

___


Alex Kennedy in Singapore contributed to this report.

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n5monthsocrapleft

SPIN ALL THE OBAMY LIE'S ALL YOU WANT , BUT THERE STILL IS NO "HOPE" N NOTHING IS GOING TO "CHANGE" UNTILL THIS MUSLIM CLOWN IS REMOVED FROM OUR WHITE HOUSE IN HANDCUFFS ALONG WITH ALL HIS TRASH~~AMERICA IS PAINFULLY WAITING"

June 22 2012 at 3:00 PM Report abuse +2 rate up rate down Reply
fakeconomics1

We need a good balance between consumers and gasoline producers. Consumer spending adds up to 75% of our GDP. When consumers spend most of their moneyon gasolene means other industry would suffer!! I am not asking oil industry to take loses.

June 21 2012 at 4:56 PM Report abuse -1 rate up rate down Reply
fakeconomics1

folks--this is a good web link if you want to know how much we import from each country by month and/or year

http://205.254.135.7/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm

June 21 2012 at 4:50 PM Report abuse -1 rate up rate down Reply
fakeconomics1

Sorry.- S/B "Gasoline". I mispelled several times but you know what I meant!!

June 21 2012 at 4:33 PM Report abuse rate up rate down Reply
Mark

Then why the HELL are we still paying over 3.00 a gallon. Kiss me before you screw me next time please.

June 21 2012 at 3:42 PM Report abuse rate up rate down Reply
brunsonneval

What is going on with these prices at the pumps across America. This should be front in center why Americans are still paying over three dollars a gallon at the pump, when the prices of a barrell of oil has dip below or at 80 dollars. What is going on, this don't make sense. When the prices rise above 110, all we hear is the President is going to have a problem, and people are going to blame him for the rise in prices, but now that the prices have falling, I don't see any cable news talking about this topic. I think the President see what I see, he not only has to defeat republicans, but big money, who are trying to controll this nation and world resources, through bribery and fear. But this is 2012 and we the people are not going to allow just a few rich people anything, you see it is not about the money it is about principle if you don't believe ask Qaddify and Mumbarak and Assad and Saddam, they all wanted to rule with their wealth but the people will not allow this to happen while they struggle to pay their bills and feed their families.

June 21 2012 at 3:23 PM Report abuse -2 rate up rate down Reply
fakeconomics1

It is a golden opportunity for Mexico and Canada to export refined gasolene and make more money!!

June 21 2012 at 2:52 PM Report abuse rate up rate down Reply
1 reply to fakeconomics1's comment
itacurubi

Mexico has a refinery capacity shortage. We are exporting gasoline too them. Canada would have logistical problems in shipping refined products. Actually, the Keystone pipeline was meant to ship unrefined Canadian tar petroleum to Gulf refineries for export ... not for the US.

June 21 2012 at 3:43 PM Report abuse -1 rate up rate down Reply
rkeeeballs

Last time I can remember a barrel of oil selling around $80 the price at the pump was $2 a gallon ! We are still being gouged by the oil companies ..BIG TIME ! They still get billions in tax breaks to boot ! Obama wants to end the breaks, Boehner just hems and haws.......yup !...must be an election year.

June 21 2012 at 2:44 PM Report abuse +3 rate up rate down Reply
fakeconomics1

Supreme Court thinks --Bribes are a form of expression?

June 21 2012 at 2:42 PM Report abuse +3 rate up rate down Reply
fakeconomics1

Now you wonder why consumers are TRAPPED? Congress is addicted to bribes---Bribing is a non stop 24/7business? Our democracy is raped by congress with the blessings from SUPRE COURT LIFE LONG WELFARE JUDGES

June 21 2012 at 2:41 PM Report abuse +3 rate up rate down Reply