Bloomberg: Crude Oil Drops a Second Day as Fed Sees Economic Risk

Crude oil fell for a second day in New York as investors speculated that fuel demand will falter after the U.S. Federal Reserve said there are “significant downside risks” to the economic outlook of the world’s biggest crude consuming nation.

Futures slipped as much as 2.1 percent after dropping 1.2 percent yesterday. The Fed said it will buy $400 billion of long term debt in an attempt to keep the economy from relapsing into a recession. U.S. gasoline stockpiles climbed more than forecast last week and the nation’s oil production rose to the highest in eight years, Energy Department reports showed.

“It’s quite clear at the moment there is a lot of bearishness,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney. “The global growth scenario continues to be clouded, all the commodities were hit and oil clearly didn’t escape.”

Crude for November delivery dropped as much as $1.77 to $84.15 a barrel in electronic trading on the New York Mercantile Exchange and was at $84.51 at 12:29 p.m. Sydney time. The contract yesterday fell $1 to $85.92. Prices are 13 percent higher the past year......Read the entire article.