Oil Futures Sag on Tepid Demand

By Dow Jones Business News, 
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By Nicole Friedman

NEW YORK--Crude-oil futures slipped Monday on low global demand, though concerns about further Western sanctions on Russia, a major oil exporter, gave some support to prices.

Light, sweet crude for September delivery fell 42 cents, or 0.4%, to $101.67 a barrel on the New York Mercantile Exchange, an eight-session low. Brent crude on ICE Futures Europe slid 82 cents, or 0.8%, to $107.57 a barrel.

Though U.S. refiners are running at unusually high rates, demand for crude oil from Asian and European refiners is weak, said Morgan Stanley in a note.

As of Friday, about 30 million barrels of West African oil had yet to be sold for August delivery, even though traders are now buying and selling cargoes for September, said Michael Wittner, head of global oil research for Société Générale, in a note.

At the same time, geopolitical unrest in Libya, Iraq, Ukraine and elsewhere is keeping traders on edge that a supply disruption could send prices shooting higher.

"We're seeing the market bounce back and forth like a yo-yo right now, because there's a lot of competing forces," said Phil Flynn, analyst at Price Futures Group in Chicago.

European governments moved closer to a consensus this week on a plan to impose wider economic sanctions on Russia in response to ongoing unrest in Ukraine. Current sanctions haven't affected Russia's oil exports. Russia is the second- largest oil exporter after Saudi Arabia.

Traders are waiting on fresh U.S. economic data, including second-quarter gross domestic product due Wednesday and the monthly jobs report on Friday. The Federal Reserve is set to begin a two-day policy-making meeting on Tuesday.

Front-month August reformulated gasoline blendstock, or RBOB, settled down 1.61 cents, or 0.6%, at $2.8492 a gallon. August diesel slipped 2.78 cents, or 1%, to $2.8897 a gallon.

Write to Nicole Friedman at nicole.friedman@wsj.com

Corrections & Amplifications

Crude oil futures traded lower despite global tensions. The headline of an earlier version of this article misstated that crude oil futures traded lower on global tensions. (July 28, 2014)


  (END) Dow Jones Newswires
  07-28-141606ET
  Copyright (c) 2014 Dow Jones & Company, Inc.


This article appears in: Energy , International , Commodities

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