By Claudia Assis and Sarah Turner , MarketWatch
SAN FRANCISCO (MarketWatch) — Oil futures pared some of their decline Wednesday, wavering between small gains and losses as the dollar extended a retreat against the euro and the sting from a dismal private-sector jobs report diminished.
Light, sweet crude for July delivery CLN11 -0.68% fell 14 cents, or 0.2%, to $102.55 a barrel on the New York Mercantile Exchange. The contract climbed 2.1% in the previous session.
Oil traded lower for most of its electronic session, however, hitting the day’s lows after Automatic Data Processing Inc. ADP -0.27% reported the U.S. economy added 38,000 private-sector jobs in May, compared with expectations for an increase of 175,000. Read more about ADP's jobs report.
The dollar index DXY -0.29% , which measures the greenback against a basket of six other currencies, lately traded at 74.465, down from 74.644 in late North American trading Tuesday.
A weaker dollar benefits dollar-denominated commodities, as it makes them less expensive to holders of other currencies.
Still, the dollar’s losses may be limited against the euro, at least for the time being, according to currency analysts at RBC Capital Markets.
“There are some signs that provision of liquidity for Greece could be largely in the price. This is evident in the inability of the euro to extend gains meaningfully,” they said, referring to the market’s moves on Wednesday.
Energy analysts at MF Global said that recent soft data offered a likely reason for Wednesday’s small rise in oil futures.
“We suspect that Tuesday’s rally in crude oil would have been more convincing if it was accompanied by strengthening macroeconomic data, but instead, we are instead seeing a noticeable slowing growth pattern across several countries, including China,” they said, referring to the latest Chinese manufacturing data. Read story on China PMI
“Recent macro data is pointing to a clear deceleration in economic growth across a number of countries, and therefore, we would suggest that such a backdrop will not sit comfortably alongside an argument calling for even higher energy prices,” they said.
The American Petroleum Institute is scheduled to report its weekly inventory data after the close of trading Wednesday, a day later because of the Memorial Day holiday.
The Department of Energy is due to release its more closely watched report on Thursday, also a day later.
