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Oil falls on disappointing economic reports
Source: Agencies |
July 16, 2010, Friday
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OIL prices retreated yesterday after the Federal Reserve said U.S. industrial production inched up 0.1 percent last month, while regional index from New York and Philadelphia showed declines.
Benchmark crude for August delivery fell 42 cents to settle at US$76.62 a barrel on the New York Mercantile Exchange.
Oil has traded between US$70 and US$80 this month as investors ponder how much a pullback of government stimulus spending could undermine global economic growth and crude demand in the second half.
On Wednesday, the Federal Reserve gave a bearish signal by lowering its 2010 gross domestic product forecast by 0.2 percentage points to a range of 3.0 percent to 3.5 percent, suggesting Europe's debt and fiscal crisis could undermine expansion of the world's No. 1 economy.
On the other hand, crude prices were supported by the weekly inventories report from the Energy Department's Energy Information Administration on Wednesday, which showed crude supplies shrank more than analysts had forecast, a sign demand may be improving.
"We expect the supply-demand balance to continue to tighten in the second half as continued global economic growth albeit likely at a slower pace continues to strengthen demand," Goldman Sachs said in a report.
Some analysts expect strong oil demand from developing economies will offset sluggish consumption in rich countries and help push prices higher. China said yesterday its economy grew 10.3 percent in the second quarter while Singapore reported a record 19.3 percent surge Wednesday.
Analysts at Switzerland-based Petromatrix said crude oil inputs to Chinese refineries hit a record high in June.
In other Nymex trading, natural gas prices jumped yesterday as Americans cranked up air conditioners with hot weather gripping much of the country. Natural gas rose 28 cents, or 6.5 percent, to settle at US$4.586 per 1,000 cubic feet.
Heating oil fell 1.78 cents to settle at US$2.0183 a gallon, and gasoline lost 0.58 cent to settle at US$2.0347 a gallon.
Brent crude fell 58 cents to settle at US$76.19 a barrel on the ICE futures exchange.
Benchmark crude for August delivery fell 42 cents to settle at US$76.62 a barrel on the New York Mercantile Exchange.
Oil has traded between US$70 and US$80 this month as investors ponder how much a pullback of government stimulus spending could undermine global economic growth and crude demand in the second half.
On Wednesday, the Federal Reserve gave a bearish signal by lowering its 2010 gross domestic product forecast by 0.2 percentage points to a range of 3.0 percent to 3.5 percent, suggesting Europe's debt and fiscal crisis could undermine expansion of the world's No. 1 economy.
On the other hand, crude prices were supported by the weekly inventories report from the Energy Department's Energy Information Administration on Wednesday, which showed crude supplies shrank more than analysts had forecast, a sign demand may be improving.
"We expect the supply-demand balance to continue to tighten in the second half as continued global economic growth albeit likely at a slower pace continues to strengthen demand," Goldman Sachs said in a report.
Some analysts expect strong oil demand from developing economies will offset sluggish consumption in rich countries and help push prices higher. China said yesterday its economy grew 10.3 percent in the second quarter while Singapore reported a record 19.3 percent surge Wednesday.
Analysts at Switzerland-based Petromatrix said crude oil inputs to Chinese refineries hit a record high in June.
In other Nymex trading, natural gas prices jumped yesterday as Americans cranked up air conditioners with hot weather gripping much of the country. Natural gas rose 28 cents, or 6.5 percent, to settle at US$4.586 per 1,000 cubic feet.
Heating oil fell 1.78 cents to settle at US$2.0183 a gallon, and gasoline lost 0.58 cent to settle at US$2.0347 a gallon.
Brent crude fell 58 cents to settle at US$76.19 a barrel on the ICE futures exchange.
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