Current Oil Prices Fall as US Vehicle Sales Rise

Oil prices were volatile during the recent trading session, giving up early increases following a report that shows a sharp rise in last month’s U.S. vehicle sales.

In the New York Mercantile Exchange, the crude price per barrel for delivery in October dropped 38 cents to $94.92 in late afternoon electronic trading, Bangkok time. During the previous trading day, the contract lost $1.17 to end at $95.30. Meanwhile, in London’s ICE Future Exchange, the crude price per barrel of Brent gained 3 cents to $114.21.

The sentiment of the energy industry was raised early on because of a report that shows a 20 percent increase in U.S. sales of new cars and trucks for the month of August. In absolute value, the growth amounted to a total of 1.3 million vehicles, an indication that gasoline use may be moving upward in the number one economy of the world. The report of Autodata Corp. also said that sales of large pickup trucks pushed the rise.

However, indications that global manufacturing is weakening, a sign that fuel demand is falling, weighed on current oil prices. The recently released survey of the Institute for Supply Management showed that factory activity in the United States declined for the third consecutive month during August.

The same decline has also been seen in almost all other economies, including 17 nations using the euro, China, Brazil, Britain and Japan. China’s factory activity dropped in the previous month to its lowest level in over three years.

Elsewhere in the energy markets, the price of natural gas gained a penny to $2.86 for every 1,000 cubic feet. The cost of wholesale gasoline slightly moved up to almost $2.96 a gallon. And the price of heating oil lost less than a penny to $3.14 a gallon.

By: Chris Termeer