10/05/2005

Energy Futures drop as demand drops (???)

Demand is down 2.6% which is a lot more than normal for this time of the year... Maybe high prices DID make an impact. Still, haven't those idiots heard of Peak Oil ? -- law

Oil and gasoline futures fell Wednesday after U.S. government data showed growing evidence of falling demand and traders shrugged off a decline in supplies.

Analysts attributed last week's drop in crude and gasoline inventories to Hurricanes Katrina and Rita, which shuttered large portions of Gulf Coast oil production and refining. They blamed high pump prices and hurricane-related evacuations of some Gulf cities for crimping fuel consumption by almost 3 percent over the past month.

"The market is down today because of the demand numbers," said oil analyst Andrew Lebow of Man Financial in New York. "But you really can't say demand has been destroyed on the basis of a few weeks of data."

Light sweet crude for November delivery fell 60 cents to $63.30 per barrel in afternoon trade on the New York Mercantile Exchange, where futures fell $1.57 on Tuesday.

Unleaded gasoline futures fell more than 11 cents to $1.905 per gallon, putting them 19 percent below the Sept. 28 peak of $2.34 a gallon.

Gasoline demand over the past month was 2.6 percent below year ago levels, according to the Energy Department, which released its weekly petroleum supply report on Wednesday. Demand for jet fuel and distillates, such as diesel, were also lower over the same period.

Societe Generale said in a research note Wednesday that the decline in demand over the past month was twice as large as the usual end-of-summer dropoff and it expects to the trend to continue, even if prices fall.

Update 14: Energy Futures Slide on Inventory Data - Forbes.com

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