BUSINESS

Price of WTI crude falls below US$96 amid pessimism over U.S., Europe

08/24/2012 08:07 EDT | Updated 10/24/2012 05:12 EDT
LONDON - The price of crude oil fell below US$96 a barrel Friday as oil markets grew pessimistic over the likelihood of more economic stimulus for the U.S. economy.

Benchmark West Texas Intermediate crude fell 43 cents to US$95.84 a barrel at midday in London in electronic trading on the New York Mercantile Exchange. The contract had fallen fell 99 cents to finish at US$96.27 in New York on Thursday.

Brent crude was down 22 cents to US$114.79 on the ICE Futures exchange in London.

The decline erased nearly all the gains made after minutes released Wednesday from the U.S. Federal Reserve's latest policy meeting suggested the Fed was preparing new steps to boost the economy. Oil traders later reassessed their initial optimistic outlook and there was also more uncertainty out of Europe.

James Bullard, president of the Fed's St. Louis bank, told CNBC on Thursday that the minutes from the Fed's meeting were "stale" because the economy had picked up since then. The oil market had hoped for another round of bond-buying, called "quantitative easing."

Stan Shamu of IG Markets in Melbourne suggested in a market commentary that the Fed was "unlikely to announce further easing" at its meeting next month based on Bullard's assessment that the minutes were outdated.

The leaders of Germany and France also suggested Thursday that they would be hesitant to extend deadlines for Greece to make reforms tied to its emergency bailout.

In other futures trading on the Nymex, gasoline futures rose 0.4 cents to US$2.9531 a U.S. gallon (3.79 litres). Heating oil was steady at US$3.14 a gallon, while natural gas rose four cents to US$2.84 per 1,000 cubic feet.

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