Oil falls as traders look to Fed talk on Friday

AP News
Posted: Aug 30, 2012 2:08 PM
Oil falls as traders look to Fed talk on Friday

The price of oil fell on Thursday as producers assessed the impact of Hurricane Isaac and traders waited to see if the Federal Reserve would act to boost the economy.

Oil fell $1, or 1 percent, to $94.49 in afternoon trading in New York.

Oil companies evacuated many Gulf of Mexico platforms and refineries in advance of Isaac, which blew through as a hurricane before being downgraded to a tropical storm. They were assessing production on Thursday.

Energy consultant Jim Ritterbusch said traders are good at accounting for the risk of tropical storms and hurricanes, which are a regular fact of life in the Gulf of Mexico.

The bigger issue for the price of oil, he said, was the potential for news from the Federal Reserve on Friday. Investors will be listening to Fed Chairman Ben Bernanke's speech for hints of additional steps to spur borrowing and spending. Some economists doubt he will say anything dramatic.

Ritterbusch noted that stocks were down on Thursday, too.

"Financial markets are nervous," he said, adding that oil was being affected.

Meanwhile, the average price of gasoline rose more than 2 cents overnight to $3.826 per gallon. Isaac has forced several refineries along the Gulf Coast to close, and others are operating at reduced rates.

In other energy trading:

— Heating oil rose 2 cents to $3.14 per gallon.

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— Wholesale gasoline fell 1 cent1 to $2.91 per gallon.

— Natural gas rose 5 cents to $2.73 per 1,000 cubic feet. The government has estimated that nearly 72 percent of Gulf natural gas production has been suspended due to Isaac. Prices rose even though more natural gas than expected was put into storage last week, according to the Energy Information Administration. It said 66 billion cubic feet of natural gas went into storage, more than the 58 billion to 62 billion cubic feet expected in a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.