Crude Oil Falls, Heads for Weekly Decline, on U.S. Debt Ceiling Dispute
By Ben Sharples and Grant Smith - Jul 29, 2011 7:41 AM CT
Oil fell, headed for the first weekly decline in five, on concern a failure to reach a deal on raising the U.S. debt limit may cause the nation to default, threatening the economy of the world’s biggest crude consumer.
Futures extended losses after data from the Commerce Department showed the world’s largest economy grew 1.3 percent in the second quarter, less than analysts predicted. U.S. crude stockpiles rose for the first time in two months last week, Energy Department data showed July 27. House Speaker John Boehner delayed a planned vote on debt-limit legislation as Senate leaders stood ready to kill the measure should it get to their chamber.
“The U.S. debt talk resembles a train wreck,” Thorbjoern Bak Jensen, an analyst at Global Risk Management, said by phone from Middelfart, Denmark. “Oil is still awaiting the debt ceiling outcome.”
Crude for September delivery fell as much as $1.22 to $97.39 a barrel in electronic trading on the New York Mercantile Exchange. It was at $96.33 a barrel at 1:33 p.m. London time. Prices are down 3.6 percent this week and 0.9 percent higher this month.