MW: Oil futures pare losses following consumer sentiment data
By Claudia Assis & Nick Godt, MarketWatch
SAN FRANCISCO (MarketWatch) -- Crude-oil futures fell Friday after Chinese inflation data fueled concerns Beijing would take further steps to cool its economy, curbing demand for energy products, and on fresh worries about consumer spending in the U.S.
Crude oil for July delivery fell 39 cents, or 0.5%, to $75.09 a barrel on the New York Mercantile Exchange. The contract hit an intraday low of $73.51 earlier, but prices trimmed their losses after news that consumer sentiment in the U.S. rose in June.
"We had a couple of negative economic news this morning and the market is giving back some of its past gains," said Tom Bentz, an commodities analyst with BNP Paribas in New York. "U.S. retail sales were disappointing."
U.S. retail sales fell a surprising 1.2% in May, the Commerce Department said Friday, the first drop in eight months and as most economists expected at least a small increase.
In addition, China's consumer-price inflation breached the 3% level for the first time in more than a year and a half. Economists said they expect inflationary pressures to ease in the second half of the year on falling global raw material prices.
Oil prices were also hit by data pointing to a moderation in China's pace of economic growth. Industrial production expanded 16.5% in May, a tad slower than April's 17.8% rise.
On the positive side, the Reuters/University of Michigan consumer sentiment index rose to 75.5 in June from 73.6 in May. Economists surveyed by MarketWatch expected an increase to 74. The index hit a 30-year low of 55.3 in November 2008.
Crude on Thursday finished above $75 a barrel for the first time in nearly a month, boosted as supportive comments from the European Central Bank eased concerns about the euro and growth in the region, while pressuring the dollar.
Oil prices are likely to remain rangebound and taking their cues from the news flow in the short-term, Bentz said.
Meanwhile, the dollar index (DXY 87.31, +0.14, +0.17%) , which compares the U.S. unit to a basket of six currencies, was moderately higher at 87.21.
Other energy products were mixed on Friday. Natural gas for July delivery added 13 cents, or 2.8%, to $4.77 per million British thermal units. Reformulated gasoline for July delivery was flat at $2.08 a gallon.
