MW; Crude-oil futures lower as demand for durable goods cools
The Energy Information Administration reports on supplies at 10:30 a.m. Eastern
By Claudia Assis and Kate Gibson, MarketWatch
SAN FRANCISCO (MarketWatch) -- Oil prices declined Wednesday as demand for durable goods slid for a second straight month and a late Tuesday report by a trade group showed a surprise rise in inventories.
Crude-oil futures for September delivery lost 31 cents, or 0.4%, to $77.20 a barrel on the New York Mercantile Exchange. A close around these levels would be oil lowest in a week.
The front-month contract on Wednesday ended at $77.50 a barrel, off $1.48.
Losses accelerated for oil after the Commerce Department said durable-goods orders declined 1% to $190.5 billion, falling short of expectations and stoking fears that a weaker manufacturing sector will lead to diminished demand for energy.
The American Petroleum Institute said Tuesday that inventories of crude last week rose 3.1 million barrels. Analysts surveyed by Platts, the energy information unit of McGraw-Hill Cos., had projected a decline of 2.3 million barrels.
The Department of Energy's Energy Department is scheduled to release its more closely watched inventory report at 10:30 a.m. Eastern.
"This morning's DOE report is now substantially more important. Traders will be looking to see if we have anywhere near as large increases in crude oil imports and inventories as the API figures showed, and they are already looking for a large decline in refinery utilization," analysts at Cameron Hanover said in a note to clients.
Oil prices have mostly stayed under $80 a barrel this year with worries about the recovery curbing attempts to pull above that level.
Yet the possibility of supply disruptions as the hurricane season gets underway in the Gulf of Mexico is offering some price support for the commodity.
Meanwhile, natural-gas futures rallied as no respite was in sight for the heat in the East Coast and other parts of the country.
Natural gas for August delivery, the thinly traded front-month contract, added 12 cents, or 2.5%, to $4.79 per million British thermal units. Most-active September contract rose 13 cents, or 2.6%, to $4.77 per million Btus.
Reformulated gasoline for August delivery declined 2 cents, or 0.9%, to $2.05 a gallon. Most-active September gasoline also lost 2 cents to $2.05 a gallon.
