Business news with words department+drop+prices. 23 news.

CRUDE oil futures jumped yesterday on supply concerns, stoked by a new round of Turkish airstrikes in northern Iraq and a growing belief that US oil inventories fell last week. Turkey's military said its warplanes bombed eight suspected Kurdish rebel positions in northern Iraq on Wednesday. It was the third Turkish strike inside Iraq in less than two weeks. Iraq produced 2.32 million barrels of oil a day in November, according to the International Energy Agency, or about 2.7 percent of the world's oil supply. As much as 400,000 barrels a day is exported north across Iraq's border with Turkey, and the air assaults raise the risk of retaliatory strikes against oil infrastructure, analysts said. "People are nervous about a possible disruption of supply on some important pipelines" in the area, Mike Fitzpatrick, an analyst at MF Global in New York, told Dow Jones Newswires. The new attacks came as oil investors awaited inventory data from the Energy Department's

OIL prices drifted higher in light holiday trading yesterday after predictions of a drop in crude inventories raised new supply concerns. With little other news to motivate buying or selling, investors focused on forecasts by analysts including Addison Armstrong, director of exchange traded markets at TFS Energy Futures LLC, who predicted crude inventories fell by 1.5 million barrels last week. Tim Evans, an analyst at Citigroup Inc, predicted that crude stocks fell by 2 million to 3 million barrels. The Energy Department's Energy Information Administration reports oil inventories on Thursday this week, a day late due to Christmas. Light, sweet crude for February delivery rose 82 cents to settle at US$94.13 a barrel on the New York Mercantile Exchange after falling as low as US$92.50 earlier. Prices rose more than US$2 on Friday after the government reported consumer spending jumped more than expected in November, raising hopes that the economy will weather the crisis roiling

CRUDE oil futures rose yesterday after the government said stocks of crude and heating oil fell sharply last week while gasoline inventories jumped. In its weekly inventory snapshot, the Energy Department's Energy Information Administration reported crude stocks dropped by 7.6 million barrels last week, much more than the 1.5 million barrel decline analysts surveyed by Dow Jones Newswires, on average, had expected. Much of the decline was due to a sharp drop in imports, almost a million barrels a day, because fog closed the Houston Ship Channel last week, said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois. "That's basically what drew crude supplies lower," Ritterbusch said. Traders expect crude supplies will rebound in next week's report, which will reflect deliveries that were delayed by the fog, Ritterbusch said. Meanwhile, investors were focusing on other aspects of the report, which were mixed. For instance, heating oil

THE year-on-year growth rate of China's home prices last month hit a two-year high, a senior official in the nation's top planning body has said. The average home price in 70 major cities rose 10.5 percent last month compared with a year ago, and average new home prices grew 12.2 percent year-on-year, Cao Changqing, head of the pricing department at the National Development and Reform Commission, said yesterday in an online interview. But Cao did not reveal last month's growth rate over October. The average housing price in these cities has increased six consecutive months, including November. In the first 11 months of this year, home prices in 70 cities increased 7.3 percent from the previous year, while new residences jumped 7.9 percent. Shenzhen and Guangzhou's home prices began to drop gradually after hiking in previous months, while home sales in popular areas such as Beijing, Shanghai, Shenzhen and Guangzhou have decreased, Cao said. Property policies will meet the

STOCKS finished mixed in another volatile session yesterday after a spike in wholesale prices touched off inflation concerns and partially overshadowed a strong increase in retail sales last month. Despite the uneven economic news, a strong forecast by Honeywell International Inc propped up the Dow Jones industrial average. Wall Street, which has this week paid close attention to steps by the Federal Reserve to stoke greater movement in moribund credit markets, again looked to fresh economic data for signals about the health of the economy. In one unwelcome development, prices at the wholesale level jumped 3.2 percent in November -- their biggest increase in 34 years -- after a steep rise in wholesale gasoline prices. The news wasn't all bad, however. The Commerce Department said retail sales rose in November by the largest amount in six months, and a Labor Department report showed a drop in new claims filed by those seeking jobless benefits. The modest movement on Wall

OIL futures rose sharply yesterday after the government reported unexpected declines in stocks of crude and heating oil last week and the Federal Reserve announced a plan to help banks weather the credit crisis. Crude supplies fell 700,000 barrels during the week ended December 7, according to a weekly inventory report from the Energy Department's Energy Information Administration. Analysts had expected a 100,000 barrel increase. And supplies of distillates, which include heating oil and diesel fuel, fell 800,000 barrels; analysts had expected inventories to rise by 300,000 barrels. "Traders are concerned about that drop in distillate supplies," said Phil Flynn, an analyst at Alaron Trading Corp., in Chicago. Earlier, the Fed said it was working with other central banks to try to counter the credit crisis. That alleviated some of investors' disappointment that the Fed on Tuesday cut interest rates by just a quarter percentage point. Many investors had hoped for a

CRUDE oil futures closed down in choppy trading yesterday, failing to breach US$100 a barrel after the government reported that crude oil inventories at a key Midwest oil terminal rose for the first time in weeks. The news helped offset the market impact of an overall drop in crude oil stocks. Light, sweet crude for January delivery fell 74 cents to settle at US$97.29 a barrel on the New York Mercantile Exchange. Stocks of distillates, including heating oil, also dropped more than expected last week, the Energy Department's Energy Information Administration reported. That could mean more bad news for heating oil customers already expecting costs to rise 22 percent this winter. Heating oil futures fell 0.27 cent to settle at US$2.6874 a gallon on the New York Mercantile Exchange after earlier hitting US$2.7154, a new record. Crude prices -- which rose as high as US$99.29 on the New York Mercantile Exchange earlier Wednesday and broke the previous intraday record of US$98.62

ENERGY futures fell yesterday after the government reported unexpected increases in crude oil and gasoline inventories last week and OPEC forecast fourth-quarter demand for oil would be less than expected. In its weekly inventory report, the Energy Department's Energy Information Administration said oil inventories rose by 2.8 million barrels during the week ended November 9. Analysts surveyed by Dow Jones Newswires, on average, had expected a decline of 300,000 barrels. That helped send light, sweet crude for December delivery falling 66 US cents to settle at US$93.43 a barrel on the New York Mercantile Exchange after trading off more than US$2 a barrel earlier. Crude prices have been volatile this week, falling more than US$3 on Tuesday and rising more than US$2 on Wednesday after hitting a record of US$98.62 one week ago. The drop in crude was limited, however, by an unexpectedly large drop in heating oil supplies, a mixed report on Iran's compliance with UN demands over

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WASHINGTON (MarketWatch) - Orders for U.S.-made factory goods rose 0.2% in September on higher gasoline prices, the Commerce Department reported Friday. Orders for durable goods fell 1.7% on a big drop in orders for defense aircraft and other defense goods. Orders and shipments for nondurable goods rose 2.1%. The value of shipments from petroleum refiners jumped 11.2% on the month, accounting for all the gain in nondurables. Total factory orders were stronger than the 0.7% decline expected by economists surveyed by MarketWatch. Factory orders had fallen a revised 3.5% in August. Special one-time factors in both directions clouded the underlying trends in September. Compared with a year ago, orders were down 0.1%, while shipments were off 0.2%.

CRUDE oil prices shot higher and then retreated yesterday, reaching a new record of US$96 a barrel before concerns about the US economy and France's decision to release oil from its strategic petroleum reserve motivated investors to cash in some of their recent gains. The Commerce Department's report that consumer spending rose by 0.3 percent in September, less than the 0.4 percent increase analysts expected, raised the prospect of a slowing economy that could depress demand for oil. And downbeat news about manufacturing came from the Institute for Supply Management, which said industrial activity grew in October at the weakest pace since March. Still, oil prices have surged 20 percent in one month, and when any market rises that far that fast, investors tend to sell to lock in some of their gains. The Federal Reserve's decision to cut interest rates a quarter-percentage point on Wednesday got a mixed reception in the oil market but probably contributed to some of Thursday's

THE widening gap between crude oil and the relatively low price of gasoline is signaling the first quarterly decline in oil prices in a year. While oil has fallen in the fourth quarter during 13 of the past 20 years because of the transition from peak summer demand, the pressure for another drop in the months ahead is the most intense since 2004 and may defer any rebound to record crude prices until the first half of 2008. Citigroup Inc, Deutsche Bank AG and HSBC Holdings Plc anticipate that oil will slide from last month's record US$83.90 a barrel as gasoline sales weaken to the lowest level this year and a slowing US economy curbs demand. Profits from making fuels are so low that refiners have 12.5 percent of capacity off line, the second-highest rate of the past two decades for this time of year, data from the US Department of Energy show. "Refinery profit margins are being squeezed at a time when significant maintenance is scheduled," said Tim Evans, an energy analyst with Citigroup Global Markets Inc in New York. "The combination of these factors should send crude oil lower." Oil traders and analysts have never been more pessimistic, with 75 percent of respondents anticipating prices will fall, according to a weekly survey by Bloomberg News that started in April 2004. Crude may end the year below US$70 a barrel, compared with US$81.66 at the end of the third quarter, according to a forecast by Adam Sieminski, a global oil analyst at Deutsche Bank in New York. If he's right, a US$1 million investment in crude oil futures in New York would more than double to US$2.3 million, assuming speculators used the exchange's minimum deposit to conduct the transaction. Not everyone forecasts that oil will move lower by the end of the year. Goldman Sachs Group Inc is the most bullish commodities trading firm on oil, forecasting on September 17 that crude will end the year at US$85 a barrel, with a "high risk" of a jump above US$90, according to a report from analysts including Jeffrey Currie in London. Its two current trading recommendations on oil are both money-losers. One of them was to buy the gasoline refining margin, which has lost more than half its value since then, Goldman's research shows.

ENERGY futures fell yesterday as traders expecting a weakening of demand in the coming months cashed in profits from the previous session's rally. While an encouraging employment report suggested the economy is weathering the problems affecting the subprime mortgage industry, many energy traders and analysts question whether demand for oil and petroleum products will be strong enough in the fourth quarter to support US$80 a barrel oil. Others argue that demand for oil will increase as home heating season progresses. While crude inventories have risen for two straight weeks, supplies of gasoline and distillates including heating oil fell last week. Investors betting demand will tighten in the fourth quarter drove oil prices US$1.50 higher on Thursday. Yesterday, light, sweet crude for November delivery fell 22 cents to settle at US$81.22 a barrel on the New York Mercantile Exchange. Futures ended the week down 44 cents a barrel, or 0.5 percent. Trading yesterday was volatile, with prices alternately rallying and falling. "There's profit-taking going on after yesterday's rally," said Addison Armstrong, an analyst with TFS Energy Futures LLC in Stamford, Connecticut. The quick resolution of many of Thursday's West Coast refinery outages also pressured prices yesterday. November gasoline fell 0.29 cent to settle at US$2.0493 a gallon on the Nymex, ending the week down 1.9 cents, or 0.9 percent. Heating oil futures fell 0.78 cent to settle at US$2.2235 a gallon. Both contracts surged more than 5 cents on Thursday. Natural gas for November delivery fell 33.9 cents to settle at US$7.073 per 1,000 cubic feet. Forecasters see little chance that a series of storms strung from the Gulf of Mexico to the central Atlantic will develop into tropical storms that could threaten critical gas and oil infrastructure. In London, November Brent crude fell 7 cents to settle at US$78.90 a barrel on the ICE Futures exchange. Oil prices have been volatile in recent days as investors have battled over whether demand will grow or weaken in the fourth quarter. "It's a stalemate right now," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "People really don't know what the next move will be." Energy Department data suggests demand for gasoline is falling, and many analysts think that's a function of this year's record gas prices. But others argue that falling refinery activity and heating oil inventories sugg

OIL prices fell today in Asia, extending a decline from the previous session that came after an unexpected increase in US crude oil inventories. Light, sweet crude for November delivery fell 28 cents to US$79.66 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore. The Nymex crude contract fell 11 cents to settle at US$79.94 a barrel in yesterday's floor session. Crude oil futures have fallen four straight days after trading at near record levels last week. The weekly inventory report from the US Energy Department's Energy Information Administration was mixed, analysts said. Crude oil supplies unexpectedly rose in the week ended Sept. 28. Gasoline and distillate inventories unexpectedly fell. And while the drop in gasoline supplies is supportive, demand for the fuel is falling, and that will pressure gasoline prices and crude futures down the road, analysts said. The EIA said in its report that crude supplies rose 1.2 million barrels last week. Analysts surveyed by Dow Jones Newswires, on average, had predicted that inventories fell 400,000 barrels. One million barrels of that increase were on the West Coast, the EIA said. Oil and gas infrastructure there is isolated from the rest of the country, though, and that might mean shortages elsewhere would support prices. Gasoline inventories fell 100,000 barrels last week, while supplies of distillates, which include heating oil and diesel fuel, fell 1.2 million barrels. Analysts had expected gasoline inventories to grow 400,000 barrels, and distillate supplies to increase 700,000 barrels. Refinery utilization rose by 0.6 percentage points to 87.5 percent of capacity. Analysts had expected an 0.4 percentage point increase. Oil's true value is closer to US$65 a barrel, said Tim Evans, an analyst at Citigroup Inc in New York, instead of at the near US$80 a barrel or higher range it has been trading. Many analysts feel oil prices have been driven up by speculative buying, and they argue that the market's underlying supply and demand fundamentals do not support the record prices of recent weeks. However, while many analysts expect oil prices to begin a seasonal decline into winter, few are willing to predict when that slide will begin. Oil prices normally drop off every year in the period between the northern summer driving season and the US and European winter. November Brent crude fell 23 cents to US$76.95 a barrel on the ICE futures

CRUDE oil may decline on speculation that near-record prices are unjustified because of rising US inventories and increased OPEC output. Twenty-three of 32 analysts surveyed, or 72 percent, said oil prices will fall from October 5, the most bearish response since the survey began in April 2004, Bloomberg News reported. Five, or 16 percent, said prices will increase and four said there will be little change. Last week, 59 percent of respondents said prices would fall. US crude-oil inventories rose 1.84 million barrels in a week, the Energy Department said in a report on September 26. The gain left supplies 8.5 percent higher than the five-year average for the period, the department said. Stockpiles at Cushing, Oklahoma, where New York-traded West Texas Intermediate oil is delivered, dropped 209,000 barrels, the report said. "While the market may be vulnerable to a squeeze based on low physical inventories at Cushing, Oklahoma, overall US commercial crude-oil stocks are comfortably above their five-year average," said Tim Evans, an analyst with Citigroup Global Markets Inc in New York. "It also looks like OPEC production is rising and the fourth-quarter demand may be revised lower." The Organization of Petroleum Exporting Countries agreed on September 11 to produce an extra 500,000 barrels a day starting in November. World oil demand peaks in the fourth quarter when refiners make heating fuel for the Northern Hemisphere winter. Crude oil for November delivery rose four cents to US$81.66 a barrel last week on the New York Mercantile Exchange. Friday's close was the second-highest since trading began in 1983.

OIL futures fell yesterday as a late flurry of selling overcame an earlier rally driven by the steadily weakening dollar. Early in the day, crude prices rose to near record levels as the dollar's drop against other currencies sparked buying by investment funds. But in the midst of that rally, analysts noted that oil's fundamentals are weak. Many believe it is only a matter of time before oil begins a seasonal price decline. Light, sweet crude for November delivery fell $1.22 to settle at $81.66 a barrel on the Nymex, giving back nearly half of the $2.58 the contract gained on Thursday. Prices rose as high as $83.76 early in the day. Oil prices peaked at a record $83.90 last week before retreating below $80 a barrel early this week. When an Energy Department report on Wednesday showed crude inventories rose last week, countering expectations for a decline, prices fell below $79 _ but then rebounded late in the day. "There's definitely been a flow of fund buying here," said Tim Evans, an analyst at Citigroup Inc. in New York. Oil and other commodities denominated in dollars are actually falling in price in the eyes of foreign investors. That's because the dollar has been sliding against other currencies since the Federal Reserve cut interest rates last week. The dollar fell further yesterday on expectations that the weak U.S. economy means another rate cut is coming. Buying by foreign investors precipitates new investment by domestic traders betting the added demand will boost prices. But Evans and other analysts argue that market fundamentals do not support such high prices. Oil inventories are falling, but that's typical for this time of year, Evans said. Oil inventories are 1.3 percent below year-ago levels, but oil's price is more than $20 a barrel higher, he said. And high oil and gas prices are depressing demand, Evans added. Stephen Schork, an analyst and trader in Villanova, Pennsylvania, argued that many funds bought oil futures this week to pad their results for the third quarter, which ends yesterday. "Hedge fund managers ... went window shopping in the (New York Mercantile Exchange crude) pit to dress up their end-of-quarter marks," Schork said in his daily Schork Report research note. "We are more interested to see how the fourth quarter begins on Monday rather than how the third quarter ends today." While Nymex crude rallied late in the week, oil prices ended the week flat, up just 4 c

CHINA'S futures brokerages are adding capital to prepare for the trading of stock index futures, the securities watchdog said in a conference in Beijing yesterday. "Fifty futures brokerages out of a total number of 163 firms have completed boosting their capital," said Huang Yuncheng, vice director of the China Securities Regulatory Commission's futures department, adding that 35 of them now have registered capital of more than 100 million yuan (US$13.3 million). Index futures would give China investors a mechanism to sell short in the stock market, betting on a drop in prices. That may help deflate the nation's rising stocks, the value of which exceeded the 2006 gross domestic product of US$2.8 trillion for the first time on August 9, said Bloomberg News. Futures brokerages need to meet the regulator's capital requirements to be able to trade and clear stock index futures. Of the futures brokers with the most registered capital, 32 are controlled by securities companies, according to Huang.

SAN FRANCISCO (MarketWatch) -- The dollar took a breather from its recent drop Wednesday, gaining on its major counterparts as stock prices rose on news of a tentative deal ending a two-day United Auto Workers strike against General Motors Corp. Currencies markets largely shrugged off dismal data released by the Commerce Department revealing that durable goods plunged 4.9% last month, the biggest monthly decline in orders for big-ticket items since January. A sharp fall had been expected, with the consensus forecast calling for a 4.5% drop. The dollar was at 115.55 yen, up from 114.68 yen in late U.S. trading Tuesday. The euro was at $1.4122, below $1.4144 Tuesday and down from a fresh record high of $1.4162 hit overnight.

WASHINGTON (MarketWatch) - U.S. consumer prices fell 0.1% in August as energy prices dropped for a third straight month, the Labor Department reported Wednesday. Energy prices fell 3.2%. Food prices rose 0.4%. Excluding volatile food and energy prices, the core consumer price index rose 0.2%, bolstered by higher prices for medical care and shelter. Both the headline and core inflation numbers were exactly as forecast by economists surveyed by MarketWatch. The CPI has risen 2% over the past year, while core prices are up 2.1%, close to the Federal Reserve's target zone.