Oil slides to two-month low as supplies rise
In a break for consumers, the threat of $100-a-barrel oil is quickly receding.
U.S. crude prices slid again Thursday, ending below $86 a barrel, as domestic inventories rose and a Kuwaiti oil executive warned about the run-up in prices since summer.
Near-term crude futures contracts in New York fell $1.69, or 1.9%, to $85.64 a barrel, the lowest since Nov. 30.
The price has fallen 6.8% from its recent peak of $91.86 on Jan. 12.
The government’s latest data on oil inventories showed U.S. supplies rose 4.8 million barrels last week, to 340.5 million, the biggest one-week rise since mid-October. Gasoline inventories also rose, for the ninth time in 10 weeks.
Meanwhile, the head of Kuwait Petroleum Corp. on Thursday expressed concern that the jump in oil prices over the last four months could slow the global economy.
“I'd be lying to you if I told you that I'm enjoying these high prices, because it makes me nervous,” Farouk al-Zanki told Reuters. “We don't want a repeat of the 2008 situation. We want the price to come down a little.”
This week, Saudi Arabian Oil Minister Ali Naimi hinted that his nation would boost output, if necessary, to keep oil from reaching $100 a barrel.
Crude traded as low as $71.63 a barrel in late August, when fears were rising that the U.S. economy could fall back into recession. But since then oil and other many commodities have surged as economic data have pointed to a continuing expansion.
In recent weeks, though, U.S. oil prices have pulled back even as prices of many other key commodities have held up. The Reuters/Jefferies CRB index of 19 major commodities slid 0.4% on Thursday but is off a modest 1% from its two-year high reached Jan. 12.
But analysts note that rising U.S. crude inventories have caused a record disparity between prices here and in London, where oil remains near $99 a barrel.
-- Tom Petruno