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Last Updated : May 15, 2015 04:27 PM IST | Source: Investing.com

Oil futures decline with eyes on U.S. data

Oil futures decline with eyes on U.S. data


Investing.com -

Investing.com - Crude oil futures were lower on Friday, as the previous session's mixed U.S. data fuelled uncertainty over the strength of the economy and investors awaited the release of fresh U.S. economic reports later in the day.

On the New York Mercantile Exchange, crude oil for June delivery hit $59.56 during European early afternoon hours, down 32 cents, or 0.53%. A day earlier, Nymex oil prices tumbled 0.62 cents, or 1.02%, to end at $59.88.

On Thursday, the Department of Labor said the number of Americans filing claims for initial jobless benefits in the week ending May 9 fell by 1,000 to 264,000, coming in just above the 15 year low reached two weeks ago, indicating that the recovery in the labor market is continuing.

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But the data was overshadowed by another report showing that the U.S. producer price index fell 0.4% last month and was 1.3% lower on a year-over-year basis, the largest drop since 2010.

The weak inflation data reinforced expectations that the Federal Reserve will hold off on raising interest rates until the economic recovery is on a stronger footing, sending the greenback lower.

Investors were now looking ahead to reports on U.S. industrial production, manufacturing activity in the New York region and consumer sentiment, due later in the day, for further indications on the strength of the economy.

Oil prices also came under pressure despite U.S. crude stockpiles falling for the second straight week. A report from the U.S. Energy Information Administration on Wednesday showed stockpiles declining 2.2 million barrels last week.

However the report also showed that U.S. oil production increased over the week and remained close to a multi-decade high at 9.4 million barrels a day.

U.S. oil prices have staged a recent rebound after dropping more than half from June to January, amid mounting expectations that U.S. shale oil production has peaked and may start falling in the coming months.

In its monthly report on Wednesday, the International Energy Agency said global crude supply was up 3.2 million barrels a day year-on-year in April, far outstripping the increase in demand.

The IEA estimated global oil demand growth of 1.1 million barrels per day this year.

The IEA also said the first drop in U.S. crude oil stocks since January the week before last did not spell the end of inventory builds, pointing to signs that petroleum product stocks are rising.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for June delivery edged down 10 cents, or 0.15%, to trade at $66.60 a barrel. On Thursday, London-traded Brent futures dropped 0.57 cents, or 0.85%, to settle at $66.70.

The spread between the Brent and the WTI crude contracts stood at $7.04 a barrel.

Investing.com


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First Published on May 15, 2015 04:27 pm
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