SINGAPORE, (AP) -Oil prices fell for a third day Wednesday after settling the day before at a seven-month low amid signs of rising global supplies.
Light sweet crude for November delivery fell 18 cents to $58.50 a barrel in midafternoon Asian electronic trading on the New York Mercantile Exchange.
November Brent crude fell 41 cents to $58.02 at London’s ICE Futures exchange.
Crude oil futures have tumbled about 25 percent in less than two months. They have fallen more than $4 this week, settling at $58.68 a barrel Tuesday, the lowest close since Feb. 16.
“There is certainly a lot of focus on fundamental supply,” said Mark Pervan, commodities analyst at Daiwa Securities in Melbourne, Australia. “Supply is ample and the speculative fear of supply disruption has eased.”
But he said prices would likely not fall much lower because traders would see the opportunity for speculating.
In New Delhi, Indian Finance Minister P. Chidambaram said the fall in global crude prices will help the government reduce its fuel subsidy and cut losses of some state-run oil companies.
In the past two years, both the government and the state-run oil companies in India have shared the cost of keeping retail fuel prices lower in comparison to global crude prices. India imports three-fourths of the crude it processes.
“Subsidy paid by firms such as Oil & Natural Gas Corp. will be lesser and to that extent these funds will be available for (new) investments,” Chidambaram told reporters.
With economic growth slowing and oil supplies rising, energy markets have become less jittery about geopolitical tensions, such as the diplomatic standoff between Iran and the West over Tehran’s nuclear ambitions. For much of the year, fear about potential sanctions against Iran, and possible retaliatory actions by OPEC’s No. 2 supplier, had gripped the market.
The conclusion of a mild Atlantic hurricane season has also eased fears of disruptions to Gulf of Mexico oil and natural gas production.
The U.S. Department of Energy said last week that U.S. inventories of crude oil stood at 324.8 million barrels, or 5 percent more than last year; inventories of distillate, which includes heating oil, stood at 151.3 million barrels, or 15 percent above year ago levels.
Later Wednesday, the Energy Department was to release data on petroleum inventories through Sept. 29. Analysts predict that crude stocks dropped about 700,000 barrels, but that gasoline stocks rose 1.2 million barrels and distillate stocks rose 1.3 million barrels.
In other Nymex trading, heating oil futures declined marginally to $1.6520 a gallon while gasoline futures rose 0.03 cent to $1.4570 a gallon. Natural gas futures rose 5.7 cents to $5.816 per 1,000 cubic feet.