WTI crude may fall on U.S. government shutdown: Bloomberg survey
NEW YORK (Bloomberg) -- West Texas Intermediate crude will probably decline next week on concern that a political impasse in Washington over the budget could lead to a recession, a Bloomberg survey showed.
Eighteen of 30 analysts, or 60%, forecast crude will decrease through Oct. 11. Six respondents, or 20%, predicted an increase and six said that there would be no change. Last week, 48% of analysts projected a decrease.
A partial government shutdown is entering its fourth day. The Treasury Department warned yesterday that a federal default could lead to a recession as bad as the 2008 financial crisis or worse. President Barack Obama urged House Speaker John Boehner to hold a vote on funding federal operations without strings attached, saying that that would end the crisis. Reports this week showed that U.S. crude and natural gas supplies rose.
“The government shutdown will have a big impact on our already-disappointing economic data and make a case for less demand,” Tom Power, senior commodities broker at RJO Futures in Chicago, said yesterday. “We’re seeing equities sell off and we had huge builds in oil and gas. I wouldn’t be surprised to see WTI break below $100 a barrel next week.”