Oil Falls As Weak Demand Met With OPEC Production Cuts

West Texas Intermediate crude declined as speculation the Federal Reserve may raise interest rates countered signs of lower production from the Organization of Petroleum Exporting Countries. Brent fell in London.

WTI slid as much as 0.8 percent in New York. The dollar headed for a sixth weekly gain versus the yen, curbing the appeal of commodities, after the Federal Reserve raised estimates for future interest rates on Sept. 17. Libya said yesterday its biggest operating oil field, Sharara, remained shut after an attack at the connected Zawiya plant.

“The Fed succeeded in not spooking the markets with a rate hike here and now, all the while raising projected interest rate paths,” Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark, said by e-mail. “Despite dwindling Libya oil output, the world still seems well-supplied with oil.”

WTI for October delivery dropped as much 73 cents to $92.34 in electronic trading on the New York Mercantile Exchange, and traded for $92.50 as of 1:10 p.m. London time. Prices are 0.3 percent higher this week after falling 3.8 percent during the first two weeks of this month. The volume of all futures traded was about 13 percent below the 100-day average for the time of day.

Brent for November settlement fell 26 cents to $97.44 a barrel on the London-based ICE Futures Europe exchange, putting its weekly gain at 0.3 percent. Prices dropped 5.8 percent during the first two weeks of this month. The U.S. contract for November was at a discount of $5.90 to Brent for the same month on ICE, compared with $5.72 yesterday.

via Bloomberg

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