Oil Prices august 26 2011, Drop After Bernanke's Speech

Oil Prices august 26 2011 Drop After Bernanke's Speech : NEW YORK (TheStreet) -- Oil prices were falling Friday on signs that U.S. economic growth has essentially stalled and on Federal Reserve Chairman Ben Bernanke's failure to satisfy the markets with an announcement of further monetary easing.



Brent crude oil for December delivery was tumbling $1.25 to $108.58 a barrel and the October West Texas Intermediate (WTI) light sweet crude contract was descending $1.75 to $83.55.



Bernanke -- during his speech at the Federal Reserve symposium at Jackson Hole, Wyo. -- said the "the recovery from the crisis has been much less robust than we had hoped ... notwithstanding the severe difficulties we currently face, I do not expect the long-run growth potential of the U.S. economy to be materially affected by the crisis and the recession if -- and I stress if -- our country takes the necessary steps to secure that outcome."



But he didn't provide any specific policy measures in his speech, disappointing oil traders.



The Commerce Department said on Friday that the U.S. economy grew less than previously thought in the second quarter amid soft inventory and export numbers.



The GDP reading was downwardly revised to growth at an annual rate of 1% from the previous estimate of 1.3%. Economists, on average, thought that GDP growth would be revised to 1.1%.



The U.S., the world's biggest oil importer, grew at a mere 0.4% in the first quarter.



Matt Smith, analyst at Summit Energy, said that minor support may come back into the energy markets on the potential for Hurricane Irene to hurt refinery production on the East Coast, where roughly 8% of domestic production takes place, but much of this has already been priced in.



October natural gas futures were flat at $3.895 per million British thermal units following Thursday's in-line storage injection of 73 billion cubic feet.



Platts had said a natural gas build within analysts' expectations would be above both the year ago and five-year average injections.



"Irene has now been downgraded to a category 2 hurricane ('only' 110mph now), and is providing an immediate cooling effect on the Southeast, reducing natural gas demand," Smith added in a morning note.



On Friday, there were increased expectations that Libyan oil production would be able to resume once security issues were resolved on reports that Libyan oil and gas infrastructure have not been damaged.



Oil and gas stocks were generally falling Friday morning. EOG Resources (EOG_) was sliding 0.7% to $87.67; Apache (APA_) was tumbling 1.6% to $97.44; Chesapeake Energy (CHK_) was falling 1.4% to $29.13; Swift Energy (SFY_) was up 0.9% to $27.96; Crimson Exploration (CXPO_) was gaining 4% to $2.35; Kinder Morgan Energy Partners LP (KMP_) was down 0.2% to $67.25; and Cheniere Energy (LNG_) was adding 2.3% to $7.29.



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