Oil Falls More Than $1 on Signs U.S. Economy, Fuel Use May Slow :

Aug. 3, 2007

Crude oil fell more than $1 a barrel after a government employment report prompted concern that U.S. economic growth will slow, reducing demand for gasoline and other fuels. Job growth slowed to 92,000 in July from 126,000 the prior month, the Labor Department said today in Washington. The jobless rate rose to 4.6 percent. Economic growth in the U.S. and China has helped spur the rise in energy demand and fuel prices. Gasoline, diesel and heating-oil inventories rose last week, a government report showed on Aug. 1. ``Any sign of a slowdown in the economy and demand growth will hit the energy markets,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. in Wakefield, Massachusetts. ``There's less concern about the product market because of the gains we saw in this week's report.'' Crude oil for September delivery fell $1.38, or 1.8 percent, to settle at $75.48 a barrel at 2:53 p.m. on the New York Mercantile Exchange. Futures declined 2 percent this week. ``We've been hearing a lot about the bull market and new records but prices are down for the week,'' said Tim Evans, an energy analyst at Citigroup Inc. in New York. New York oil touched $78.77 on Aug. 1, the highest since trading began in 1983, after the release of an Energy Department report showing that crude-oil supplies fell 6.5 million barrels last week. Futures declined 2.2 percent, the biggest one-day drop since June 8, for the day as a whole, because of increased refinery output and rising fuel stockpiles. ``This morning's job report won't have a major impact on the market because the bottom line is that tight crude supplies around the world will eventually spread to the product markets,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd, the brokerage unit of Man Group Plc, in New York. `Danger Zone' Rising crude oil prices, while having a ``modest'' impact, are still putting the U.S. economy in a ``danger zone,'' Energy Secretary Samuel Bodman said yesterday, urging OPEC and non-OPEC producers to begin delivering more oil to the U.S., the world's largest energy user. Members of the Organization of Petroleum Exporting Countries increased production an average 445,000 barrels a day last month, led by gains in Iraq and Nigeria, a Bloomberg News survey showed today. Output averaged 30.48 million barrels a day, according to the survey of oil companies, producers and analysts. OPEC ministers are expected to discuss changing production when they hold their next scheduled meeting on Sept. 11 in Vienna. Brent crude oil for September settlement fell $1.01, or 1.3 percent, to $74.75 a barrel on the London-based ICE Futures exchange. It was the lowest close since July 5. New Highs ``Traders are looking for an excuse to retest those highs,'' said Eric Wittenauer, an energy analyst at A.G. Edwards & Sons Inc. in St. Louis. ``A geopolitical event, hurricane or tropical wave could send us to a new high.'' Colorado State University forecasters trimmed the number of major hurricanes they expect to form in the Atlantic Ocean this year to four from five forecast in May. Scientists Philip Klotzbach and William Gray said those intense storms, with winds of at least 111 miles (179 kilometers) an hour, will be among eight total hurricanes to form, down from the nine they predicted before the June 1 start of hurricane season. A record 28 named storms formed in the Atlantic in 2005, including hurricanes Katrina and Rita, which devastated the oil and natural-gas industries along the U.S. Gulf Coast. ``The Colorado State University forecast is a reminder that prices are vulnerable on the downside,'' Evans said. ``It might not take a dramatic event to puncture the balloon and send prices to a more reasonable level.'' [From Internet]

Note: The "Introductory Offer" for the Premium (Paid) Group Membership Closes, on or before 15th August, 2007 [15-08-07]. So, interested persons should rush me an e-mail for the details at: suman2005s@rediffmail.com