In the afternoon, both the Brent and West Texas Intermediate (WTI) crude oil contracts followed the equity markets lower, with Brent for November delivery slumping 80 cents to $114.01 a barrel and the WTI for October delivery down 9 cents at $89.25.
Both products were coming off several straight days of spikes.
Many traders have low expectations for the economic package that President Obama is expected to announce in his speech before Congress at 7 p.m. ET, lamenting that the event will likely be more focused on politics than anything else."The president is speaking tonight about the jobs package and it's having a negative effect ," said Chicago-based PFGBest trader Dan Flynn. "I'm expecting negative vibes," he remarked. "The negative reaction in the global stock market should weigh heavily on crude." Federal Reserve chairman Ben Bernanke's speech in Minnesota Thursday did little to ease the market's cautious stance as he held back on providing a specific action points for stimulating the economy. He only repeated that the central bank is committed to reviving the economy and had tools for reaching this goal. Providing some support to oil today was the Department of Energy's bullish inventory report of a 4 million barrel draw in crude-oil inventories for the week ended Sept. 2 and the heavy Atlantic hurricane season seeing storm activity brewing in the Gulf. October natural gas futures settled up 4 cents at $3.980 per million British thermal units in a slow, quiet trading day for this market, as traders cautiously awaited Obama's speech ahead of the weekend and digested a slight build in natural gas inventories. The build of 64 billion cubic feet was just above the midpoint of market expectations and a tick above the 63 bcf five-year average," said Citi Futures Perspective energy analyst Tim Evans. "This was not a major miss and may reflect a modestly larger-than-expected impact from Hurricane Irene on East Coast consumption for last week, rather than a bearish shift in the background supply-demand balance," he explained. Energy stocks were trading mixed. EOG Resources (EOG - Get Report) was falling 1.4% to $89.38; Gulfport Energy (GPOR - Get Report) was up 0.1% to $28.10; Newfield Exploration (NFX - Get Report) was flat at $49.87; Hess (HES - Get Report) was rising 0.4% to $59.50; Cheniere Energy (LNG - Get Report) was tumbling 3% to $7.39; Chevron (CVX - Get Report) was lower by 0.7% to $98.57; and Suncor Energy (SU - Get Report) was down 0.5% to $30.70. -- Written by Andrea Tse in New York.
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