Oil Drops Most in 17 Years in Quarter on Economy Woes

(Bloomberg) — Crude oil futures plunged 28 percent in the third quarter, their biggest decline since 1991, amid concern that slowing economic growth will curtail global demand and as the dollar advanced.

Oil traded within a $56 range in the quarter, reaching a record $147.27 a barrel on July 11 and retreating to as low as $90.51 a barrel on Sept. 16, as long-term supply concerns gave way to forecasts a recession would cause fuel use to drop. The dollar is having its best quarterly gain against the euro.

“It’s been one of the wildest quarters I’ve ever seen,” said Peter Beutel, president of Cameron Hanover Inc. in Stamford, Connecticut, who has been watching the oil market for 25 years.

Crude oil for November delivery fell $39.36 in the three months ended today to settle at $100.64 a barrel at 2:51 p.m. in New York Mercantile Exchange trading. It was the first decline in seven quarters. Futures moved 5 percent or more on a quarter of the trading days. Oil rose $4.27, or 4.4 percent, today.

Crude posted the biggest single-day gain ever on Sept. 22, as traders rushed to unwind positions on the October contract’s last day of trading. Prices rose as much as $25.45 a barrel before closing up $16.37, or 16 percent, to $120.92 a barrel.

“It’s certainly been a tremendously volatile quarter, and you can throw the way the October contract expiration occurred in as a part of that,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “Volatility has just bloomed here and hasn’t settled down.”

Bloomberg