Oil fluctuated in New York, after declining for three weeks, as concern that the global economy is slowing countered a less-than-expected contraction in Japan, the world’s third-biggest consumer of crude.
Futures were little changed after falling as much as 0.6 percent and climbing 0.3 percent. Reports this week may show the U.S. housing industry remained depressed in July and European growth eased last quarter. Japan’s economy shrank at an annualized 1.3 percent rate in the three months ended June 30, compared with the median forecast for a 2.5 percent drop in a Bloomberg News survey of 25 economists.
“The market is still nervous,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, who maintained his forecast for New York oil to average $100 a barrel this year. “We’ve got a big week of numbers. I think the market has to try and get into the week on a positive note.”
Crude for September delivery was unchanged at $85.38 a barrel in electronic trading on the New York Mercantile Exchange at 4:15 p.m. Sydney time. The contract slid 34 cents, or 0.4 percent, to $85.38 on Aug. 12. Prices have fallen 15 percent in the past three weeks and 7 percent this year.
Brent oil for September settlement was at $108.04, up 1 cent, on the London-based ICE Futures Europe. The European benchmark was at a premium of $22.69 to U.S. futures, compared with a record close of $23.79 on Aug. 10.
Economic Reports
Reports this week will show U.S. housing starts and building permits fell in July, while consumer prices rose the least in three months as unemployment restrained spending, according to surveys by Bloomberg News. The eurozone economy probably expanded 0.3 percent in the second quarter, down from first-quarter growth of 0.8 percent.
Asian stocks rose today after three weeks of losses in global equity markets sent valuations to the lowest levels in more than two years. The MSCI Asia Pacific Index gained 1.7 percent at 3:17 p.m. in Tokyo, snapping a two-day loss, and futures on the Standard & Poor’s 500 Index climbed 0.7 percent.
New York oil futures slumped as low as $75.71 a barrel and climbed as high as $87.37 last week before closing 1.7 percent lower, the third straight weekly decline.
Hedge funds cut bullish bets on crude to the lowest level in more than eight months in the week ended Aug. 9, according to a report last week. The funds and other large speculators reduced their net-long positions, or wagers that prices will rise, by 11 percent, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report.
Technical Support
Oil has technical resistance at $89.84 a barrel, the 50 percent Fibonacci retracement of the drop in December 2008 to $32.40 from a record $147.27 in July that year, according to data compiled by Bloomberg. Futures last week rebounded after dropping below the 38.2 percent retracement at $76.28, signaling a failure to sustain a breach of chart support.
Tropical Storm Gert is expected to pass near Bermuda today, the National Hurricane Center said in an advisory at 11 p.m. Miami time yesterday. Gert was located about 170 miles (275 kilometers) south-southeast of Bermuda with maximum sustained winds of 45 mph, and was moving north-northwest at about 12 mph.
The U.S. is the world’s biggest crude-consuming nation, followed by China.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
