BLBG: Oil Is Steady Amid Concern Rescue Won't Halt Economic Slide
By Mark Shenk
Oct. 3 (Bloomberg) -- Crude oil was little changed amid skepticism that a $700 billion bank-rescue plan will keep the U.S. from falling into a recession, curbing demand.
Oil prices are down 12 percent for the week, the biggest drop since 2004, amid higher borrowing costs and reports showing a worsening economy. U.S. fuel demand averaged 19 million barrels a day during the past four weeks, the lowest since October 2001, the Energy Department said in an Oct. 1 report.
``It doesn't look like any action taken by the government will turn the economy around in time to bolster the market,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``People were anticipating the bill would pass.''
Crude oil for November delivery fell 9 cents to $93.88 a barrel at 2:45 p.m. on the New York Mercantile Exchange, the lowest settlement price since Sept. 16. Prices, up 17 percent from a year ago, have dropped 36 percent from the record $147.27 a barrel reached on July 11.
U.S. payrolls fell by 159,000, more than expected in September, after a 73,000 decline in August, the Labor Department reported today in Washington. An Institute for Supply Management report on Oct. 1 showed that manufacturing shrank in September at the fastest pace since the last recession in 2001.
The U.S. may fall into a recession as the financial rout deepens, the International Monetary Fund said in its most pessimistic outlook for the world's largest economy since the credit crisis began last year. The U.S. consumes about 24 percent of the world's oil.
Brent crude oil for November settlement declined 31 cents, or 0.3 percent, to settle at $90.25 a barrel on London's ICE Futures Europe exchange, the lowest since Sept. 16.
To contact the reporter on this story: Mark Shenk in New York at firstname.lastname@example.org.