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Oil edges lower after economic reports
Source: Agencies |
August 5, 2010, Thursday
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OIL prices fell slightly from a three-month high above US$82 a barrel yesterday despite reports that contained some good news on the U.S. jobs front.
Benchmark crude for September delivery fell 8 cents to settle at US$82.47 a barrel on the New York Mercantile Exchange. The price has been at levels not seen since May for three consecutive days despite ample supplies or oil in storage and weak demand for gasoline and other refined products.
Two jobs reports indicated yesterday that the U.S. economy is growing but at a slow pace.
ADP, a payroll company, said private employers hired 42,000 workers last month, which was slightly better than analysts expected. The report can provide clues about what the Labor Department's monthly job report, due Friday, may show.
In addition, the Institute for Supply Management its service-sector index rose unexpectedly for July. A measure of hiring expectations for the sector, which accounts for the majority of U.S. workers, expanded in July for only the second time since December 2007.
In its weekly report, the Energy Department said U.S. commercial oil inventories fell by 2.8 million barrels to 358 million barrels for the week that ended July 30. The total remains 2.4 percent higher than a year ago.
Analysts had expected a drop of 1.2 million barrels for the week ended July 30, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Gasoline inventories rose 700,000 barrels last week to 223 million barrels. Analysts expected a drop of 870,000 barrels.
Demand for gasoline over the four weeks ended July 30 was 2.3 percent higher than a year earlier, averaging nearly 9.4 million barrels a day.
Inventories of distillate fuel, which include diesel and heating oil, increased by 2.2 million barrels to 169.7 million barrels for the week ended July 30. Analysts expected distillate stocks to increase by 1.16 million barrels.
Oil broke above US$80 this week as the euro rose to a three-month high against the dollar. The dollar however climbed off lows yesterday as the upbeat reports on jobs and the service industry reassured investors that the U.S. economy is continuing to grow.
The euro dropped to US$1.3172 in late New York trading from US$1.3231 late Tuesday, while the dollar edged up to 86.24 Japanese yen from 85.85 yen.
"The path of the dollar - especially versus the yen - and the risk of weakness in the U.S. economy are expected to remain major influences this week," said a report from Sucden Financial in London. "Economic events - including rate announcements Thursday and employment data Friday - will all be watched closely to help assess oil demand and help determine if there is a new price range for oil." the ICE Futures exchange.
In other Nymex trading in September contracts, heating oil rose 0.22 cent to settle at US$2.2022 a gallon, gasoline lost 1.85 cents to US$2.1750 a gallon and natural gas added 9.8 cents to US$4.737 per 1,000 cubic feet.
In London, Brent crude fell 48 cents to settle at US$82.20 a barrel on the ICE Futures exchange.
Benchmark crude for September delivery fell 8 cents to settle at US$82.47 a barrel on the New York Mercantile Exchange. The price has been at levels not seen since May for three consecutive days despite ample supplies or oil in storage and weak demand for gasoline and other refined products.
Two jobs reports indicated yesterday that the U.S. economy is growing but at a slow pace.
ADP, a payroll company, said private employers hired 42,000 workers last month, which was slightly better than analysts expected. The report can provide clues about what the Labor Department's monthly job report, due Friday, may show.
In addition, the Institute for Supply Management its service-sector index rose unexpectedly for July. A measure of hiring expectations for the sector, which accounts for the majority of U.S. workers, expanded in July for only the second time since December 2007.
In its weekly report, the Energy Department said U.S. commercial oil inventories fell by 2.8 million barrels to 358 million barrels for the week that ended July 30. The total remains 2.4 percent higher than a year ago.
Analysts had expected a drop of 1.2 million barrels for the week ended July 30, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Gasoline inventories rose 700,000 barrels last week to 223 million barrels. Analysts expected a drop of 870,000 barrels.
Demand for gasoline over the four weeks ended July 30 was 2.3 percent higher than a year earlier, averaging nearly 9.4 million barrels a day.
Inventories of distillate fuel, which include diesel and heating oil, increased by 2.2 million barrels to 169.7 million barrels for the week ended July 30. Analysts expected distillate stocks to increase by 1.16 million barrels.
Oil broke above US$80 this week as the euro rose to a three-month high against the dollar. The dollar however climbed off lows yesterday as the upbeat reports on jobs and the service industry reassured investors that the U.S. economy is continuing to grow.
The euro dropped to US$1.3172 in late New York trading from US$1.3231 late Tuesday, while the dollar edged up to 86.24 Japanese yen from 85.85 yen.
"The path of the dollar - especially versus the yen - and the risk of weakness in the U.S. economy are expected to remain major influences this week," said a report from Sucden Financial in London. "Economic events - including rate announcements Thursday and employment data Friday - will all be watched closely to help assess oil demand and help determine if there is a new price range for oil." the ICE Futures exchange.
In other Nymex trading in September contracts, heating oil rose 0.22 cent to settle at US$2.2022 a gallon, gasoline lost 1.85 cents to US$2.1750 a gallon and natural gas added 9.8 cents to US$4.737 per 1,000 cubic feet.
In London, Brent crude fell 48 cents to settle at US$82.20 a barrel on the ICE Futures exchange.
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