BLBG: Oil Declines From One-Week High as Traders Sell Futures to Lock in Gains
Oil fell in New York for the first time in four days as traders sold contracts to lock in gains following a rally to a one-week high above $76 a barrel.
Oil rose earlier as China, the world’s second-largest energy consumer, reported crude imports reached a record in June. Retail sales in the U.S., the biggest energy user, probably fell in June for a second month and industrial production cooled, signs the expansion will moderate in the second half, economists said before reports this week.
“Some profit-taking is coming into the market,” said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge Group in Tokyo. “From a technical point of view, $76.50 near last week’s highs is around a level to sell. This market will continue to be range-bound.”
Crude for August delivery dropped as much as 49 cents, or 0.6 percent, to $75.60 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $75.64 at 2:22 p.m. Singapore time, earlier reaching $76.43. Futures, up 27 percent in the past year, have lost 4.7 percent in 2010.
China’s net crude purchases climbed to 22.14 million metric tons in June, beating the previous record of 20.98 million tons in April, according to preliminary data from the General Administration of Customs on July 10. Imports surged 30 percent in the first half of this year on higher demand and lower costs. The country paid an average of $77.20 a barrel for crude in June, compared with $82.50 in May.
“The Chinese trade data was quite strong for crude oil imports,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “U.S. demand has picked up over the year, but the strongest growth is in the developing economies.”
Weekly Gain
Oil increased 5.5 percent last week, the biggest rally in six weeks, as declining U.S. crude stockpiles and a drop in jobless claims bolstered speculation the country would sustain its economic recovery.
U.S. commercially held oil inventories tumbled 4.96 million barrels in the week ended July 2, the most since September, as refiners boosted operating rates, the Energy Department said in a July 8 report. Fuel demand rose 3.2 percent to 19.6 million barrels a day, the highest since the week to May 28.
Hedge-fund managers and other large speculators reduced their net-long position in New York oil futures for a second week, U.S. Commodity Futures Trading Commission data showed.
Speculative long positions, or bets prices will rise, outnumbered short positions by 26,215 contracts in the week ended July 6, the Washington-based commission said July 9 in its Commitments of Traders report.
Brent crude for August settlement fell as much as 51 cents, or 0.7 percent, to $74.91 a barrel on the London-based ICE Futures Europe exchange. It was at $74.95 at 2:21 p.m. Singapore time. On July 9, the contract climbed 71 cents, or 1 percent, to $75.42, settling higher for a third day.
To contact the reporters on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net
