Oil Declines a Second Day After China’s Economy Grows Slowest in Two Years

Oil dropped for a second day in New York after China said its economy grew at the slowest pace in two years and U.S. crude stockpiles were forecast to increase.

Futures fell as much as 0.5 percent, extending yesterday’s 0.5 percent decline, after China’s statistics bureau said the economy grew at 9.1 percent in the third quarter, less than forecast. An Energy Department report tomorrow may show U.S. crude stockpiles climbed for a second week, according to a Bloomberg News survey.
Crude for November delivery slid as much as 40 cents to $85.98 a barrel and was at $86.03 in electronic trading on the New York Mercantile Exchange at 1:36 p.m. Sydney time. The contract yesterday decreased 42 cents to $86.38, the lowest close since Oct. 13. Prices are down 5.9 percent this year.

Brent oil for December settlement dropped 32 cents, or 0.3 percent, to $109.84 a barrel on the London-based ICE Futures Europe exchange. The contract yesterday fell $2.07, or 1.8 percent, to $110.16.

Crude stockpiles probably rose by 2 million barrels last week, according to the median of nine analyst estimates in a Bloomberg News survey before the weekly Energy Department report tomorrow. All the respondents forecast and increase.

Fuel Supplies

Gasoline inventories probably declined 1 million barrels last week, according to the survey. Stockpiles of distillates, a category that includes heating oil and diesel, likely fell 1.5 million barrels, the survey shows.

Libya’s Ras Lanuf oil refinery, the country’s largest, will be ready to start operations next month after being shut in March amid fighting between forces loyal to Muammar Qaddafi and rebels seeking his ouster, acting Chief Executive Officer Abdo A. Ahmed said yesterday. The plant can process 220,000 barrels of crude a day.

Fighting in Libya reduced the availability of light, sweet crude, or oil with low density and sulfur content. The country’s output fell to 45,000 barrels a day in August, according to Bloomberg estimates. The North African nation pumped 100,000 barrels a day last month.

China’s gross domestic product increased less than the median estimate of 9.3 percent in a Bloomberg News survey of 22 economists. The country’s is the second biggest crude-consuming nation behind the U.S.(Bloomberg)