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[uscitizen]

Oil, Gas Futures Off on Economic Worries

By JOHN WILEN
AP Business Writer


NEW YORK (AP) -- Oil and gasoline futures fell Thursday as investors turned their attention away from tropical storms and to the cooling economy and falling stock market.

Natural gas futures ended a volatile day higher despite a government report that showed inventories growing more than expected.

The stock market tumbled again as concerns about economic conditions were exacerbated by more bad news from the mortgage sector, and by dismal reports on housing construction and employment.

"That in turn has once again raised fears that oil demand will fall," wrote Addison Armstrong, an analyst with TFS Energy Futures LLC in Stamford, Conn., in a research note.

http://hosted.ap.org/dynamic/stories/O/OIL_PRICES?SITE=FLTAM&SECTION=BUSINESS&TEMPLATE=DEFAULT&CTIME=2007-08-16-18-37-59

 

[Topspin]

Oil jumps on Fed rate cut, storm fears
Crude prices climb more than $1 a barrel as central bank lowers discount rate, Hurricane Dean gains strength.
August 17 2007: 9:07 AM EDT


LONDON (Reuters) -- Oil prices jumped by more than $1 a barrel Friday on concerns about Hurricane Dean's potential impact on Gulf of Mexico oil operations and after the U.S. Federal Reserve cut the primary discount rate a half-point to 5.75 percent.

U.S. crude gained $1.31 to $72.31 a barrel. It had fallen $2.33 on Thursday when investors sold energy to offset losses elsewhere or out of fear that a squeeze on credit will slow global economic growth.

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London Brent crude was up 55 cents at $70.32.

Why Gulf storms make oil traders so jumpy
Oil prices moved higher after the Federal Reserve, reacting to concerns about the subprime lending crisis and the volatility in the financial markets, announced Friday that it is cutting its so-called discount rate by a half percentage point, to 5.75 percent.

Markets are being battered by fears of financial instability following troubles with risky U.S. mortgages and a squeeze on credit that has prompted central banks to push money into the financial system.

Economists say the drying up of mortgage credit will worsen the U.S. housing market slump, cutting deeper into U.S. growth than estimated just weeks ago, although analysts said the Asian economies driving oil demand remained strong.

Thursday's selling struck across the commodities complex, with the Reuters/Jefferies CRB Index falling 3.4 percent to a six-month low.

Traders continue to monitor Hurricane Dean, which forecasters said could strengthen into a Category 4 storm over the next few days.

The latest computer models show the storm crossing the tip of the Yucatan peninsula then heading into the Gulf of Mexico