Crude Oil Trades Below $95 As Gasoline Pump Prices Fall

                      Yesterday crude oil tumbled to its lowest point in four months and remains below $95.00 this morning. Oil gained 10 cents to trade at 94.73. Orders for non-defense capital goods excluding aircraft, a closely watched gauge of business investment, declined a seasonally adjusted 3.7% in the period from July through September, according Commerce Department data released Monday. The decline reverses the better than 4% gain during the second quarter and stands in contrast to the sharp increase in capital expenditures during the early stages of the economic recovery. The Commerce Department will release its initial estimate of third-quarter gross domestic product on Thursday. Overall, Monday’s Commerce report showed total factory orders advanced 1.7% in September, propelled by demand for aircraft and military equipment. Orders contracted 0.1% in August. The two months of data were released simultaneously Monday as a result of the government shutdown. The August numbers were initially scheduled for release in early October. The factory orders report was the first of four releases to include two months of data at a time. The next is housing starts on Nov. 26.

Brent oil climbed 17 points to trade at 106.38 but remains weak as data shows increased production throughout the Middle East and lower demand. Geopolitical tensions continue to ease as Libya continues to increase production. Libya, North Africa’s largest oil producer, prepared to resume exports at two terminals, according to the state oil company. U.S. crude stockpiles are at the most in four months, and shipments from Iraq jumped in October, government reports showed last week. A tanker is scheduled to take on oil at Libya’s Mellitah terminal tomorrow and loading will probably resume next week at Hariga once vessels arrive at the eastern port, said Mohamed Elharari, a spokesman for state-run National Oil Corp. Production in the country has been reduced amid nationwide protests. Output was about 250,000 barrels yesterday, Elharari said. It averaged 450,000 barrels a day in October, according to a monthly Bloomberg survey of production across the Organization of Petroleum Exporting Countries.

This morning’s slight rise in prices was supported by some positive data. Traders welcomed data that showed euro-zone factory activity edged higher in October, thanks to modest strength in Germany and other northern economies. The Markit manufacturing purchasing managers’ index for the currency bloc rose to 51.3 from 51.1 in September, above the 50 threshold that separates expansion from contraction. The reading was unchanged from an earlier estimate.

The price of gasoline at the pump for U.S. drivers fell to the lowest level of the year as wide spreads between U.S. and Brent have driven American refiners to produce more fuel than ever for this time of year. The average retail price fell 2.9 cents to $3.265 a gallon in the week ended today, the lowest level since Dec. 4, the Energy Information Administration reported on its website. Prices are 22.7 cents below a year earlier. U.S. refineries produced 9.434 million barrels a day of gasoline the week of Oct. 25, the highest seasonal level in weekly EIA data going back to 1982.  - fxempire