Brent crude headed to $90 a barrel on concern weaker growth in Europe will reduce demand. West Texas Intermediate fell for a third day.
Futures slipped as much as 0.9 percent in London and 0.8 percent in New York. Germany’s economy is on the edge of recession as exports to China and Russia sag, according to a report by four economic institutes. WTI dropped after a government report yesterday showed U.S. inventories jumped the most since April.
“Two factors have been driving oil prices lower,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Worries about economic conditions, underlined by the reports about German growth, and ample supplies, demonstrated by the big build in U.S. supply.”
Brent for November delivery dropped 33 cents, or 0.4 percent, to $91.05 a barrel at 9:02 a.m. New York time on the ICE Futures Europe exchange in London after touching $90.59. The volume of all futures traded was 33 percent above the 100-day average for the time of day. The contract ended at $91.38 yesterday, the lowest since June 28, 2012. It was more than 20 percent below this year’s June peak, meeting a common definition of a bear market.
WTI for November settlement dropped 44 cents, or 0.5 percent, at $86.87 a barrel on the New York Mercantile Exchange. Volume was 34 percent above 100-day average. The European benchmark crude traded at a premium of $4.22 to WTI on ICE. The spread closed at $4.07 yesterday, the widest in two weeks.
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