THE WALL STREET JOURNAL
4 NOVEMBER 2008
Crude-oil futures fell on signs that a widening economic slowdown may freeze growth in petroleum demand next year.
Light, sweet crude for December delivery settled $3.90, or 5.8% lower, at $63.91 a barrel on the New York Mercantile Exchange. Nymex crude is down more than $80 from its July peak, pressured by softening demand and a stronger dollar.
![[Crude-Oil Futures]](https://i0.wp.com/s.wsj.net/public/resources/images/MI-AT285_COMMOD_NS_20081103185629.gif?resize=413%2C312)
The grim demand picture was reinforced by a sequence of manufacturing reports released Monday. U.S. factory activity contracted in October, with the Institute for Supply Management index at its lowest since 1982. In Europe, manufacturing in the eurozone declined at its fastest pace on record last month, according to a survey of purchasing managers. Separate data showed U.K. manufacturing shrinking for the sixth consecutive month. In China, manufacturing activity also dimmed.
“It’s really about the manufacturing numbers today, in the U.S. and globally,” said Phil Flynn, a broker with Alaron Trading Corp. in Chicago. “It’s been a very good forward indicator of future energy demand. If the manufacturing sector in the U.S. is at a 26-year low and globally the manufacturing numbers were poor as well, that seems to suggest demand is going to get worse before it gets better.”
Futures prices of petroleum products also fell, with reformulated gasoline blendstock, or RBOB, for December delivery dropping 8.9% to settle at $1.3625 a gallon. December heating oil fell 4.9% to $1.9828.
Meanwhile, the national average retail price of regular gasoline fell 9.6% to $2.40 a gallon in the week ended Monday, the Energy Information Administration said. This is the biggest percentage drop in agency records dating back to August 1990.
Write to Gregory Meyer at [email protected]
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