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Oil prices trading down 2 percent on US bank trading curbs
Published on January 22, 2010 by oilprices · No CommentsOil prices are trading down around 2 percent in Asia on Friday below $76 a barrel after talk of US bank trading curbs upset speculators, while refiners in top consumer the US processed the least crude in decades, reacting to a fuel demand slump.
Proposals by US president Barack Obama to cut proprietary trading at large banks sent Asian stock markets and commodities including oil prices tumbling. Japan’s benchmark index lost almost 3 per cent, and the US dollar slipped to its lowest in five weeks against the Japanese yen.
US refinery utilisation, the proportion of total capacity at which refiners operate, fell 2.9 percentage points to 78.4 per cent last week, a government report showed yesterday. That was the lowest since the 1980s, barring occasional periods of hurricane-related disruptions, Department of Energy data showed.
New York’s main contract, US Light sweet crude oil futures for March delivery, tumbled 12 cents to $75.96 a barrel on the NYMEX, while in London, Brent North Sea crude oil futures for delivery in March shed 15 cents to $74.43.
The US Department of Energy said yesterday that petrol reserves in the world’s biggest economy increased by a stronger than expected 3.9 million barrels in the week ending January 15, striking a two-year high. It also said refineries operated at 78.4% of capacity last week, their lowest rate in at least two decades apart from the immediate aftermath of a hurricane. However, US crude stocks fell 400,000 barrels, according to the report, confounding expectations of a large gain of 1.9 million barrels.
Moves by China, the world’s second biggest energy consumer, to slow down its roaring economy also weighed on traders’ minds. China’s red-hot economy expanded 10.7% in the last quarter of 2009 and by 8.7 percent for the whole of the year.