CT: Crude Flat As Economic Outlook Remains Uncertain
NEW YORK (Dow Jones)--Crude futures traded close to unchanged Monday, as the oil market struggled to shake off a gloomy economic outlook that drove prices sharply lower at the end of last week.
Light, sweet crude for July delivery traded 5 cents, or 0.1%, lower at $71.46 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 33 cents, or 0.5%, higher at $72.42 a barrel.
Crude futures recovered from a steep slide in Asian trading overnight as the selloff that began with the release of worse-than-expected U.S. unemployment figures Friday spread to other markets. But prices failed to gain back much of Friday's losses as buying remains constrained by worries that the U.S. economic recovery is stalling. At its overnight low of $69.51 a barrel, the July crude contract was down nearly 7% since Thursday's settlement.
"We did trade near $69.50 overnight, and the markets are already $2 off that low," said Tom Bentz, a broker and analyst with BNP Paribas Commodity Futures Inc. "That's somewhat encouraging."
The Department of Labor reported Friday that the U.S. economy added 431,000 jobs in May, but that figure was inflated by temporary government hiring for the 2010 Census. Private sector hiring was at its lowest level since January.
A broad selloff ensued, with investors fleeing riskier assets like stocks and some commodities and seeking refuge with the dollar, which reached a four-year high against the euro. On Monday, the dollar continued to strengthen, reaching $1.1876 against the euro before weakening to $1.1970 recently, as investors remain concerned that high debt levels in several euro-zone economies could slow economic growth across the continent.
Some traders said the uneven U.S. recovery and Europe's sovereign debt problems may still drag oil lower.
"A bearish trading bias still appears justified from our vantage point with a test of the late May lows just above the $67.00 area still a reasonable target in this week's crude trade," Jim Ritterbusch, president of oil trading advisory firm Ritterbusch & Associates said in a note to clients.
Front-month July reformulated gasoline blendstock, or RBOB, recently traded 1.05 cents, or 0.5%, higher at $2.0058 a gallon. July heating oil traded 1.37 cents, or 0.7%, higher at $1.9714 a gallon.
-By Matt Day, Dow Jones Newswires; 212-416-4986; matthew.day2@dowjones.com
