By Claudia Assis and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures turned lower Friday, more than erasing the previous session’s gains as U.S. stocks were mixed, muddling investor sentiment on prospects for oil demand ahead of the weekend.
Crude oil for October delivery CL1V -1.74% retreated $1.46, or 1.6%, to $87.87 a barrel on the New York Mercantile Exchange, near session lows. It earlier traded as low as $87.65 a barrel and as high as $89.78 a barrel.
Oil markets discounted a good read for consumer sentiment in the U.S. out Friday.
Oil markets have been focusing on and trading in tandem with equities in recent months, and losses mounted for oil as shares erased earlier gains.
Stocks act as a proxy of economic health in the U.S. and as such of prospects for oil demand. Read more about stocks.
The Thomson Reuters/University of Michigan gauge of consumer sentiment rose to 57.8 in the preliminary reading for September after tumbling to a nearly three-year low 55.7 in August, according to reports.
Economists polled by MarketWatch had expected a rise to 57.3 with equity markets volatility and weak employment keeping consumers worried. In August, sentiment had reached the lowest level since November 2008 with Washington’s protracted debt-ceiling negotiations taking a toll on any optimism.
Oil rose 0.6% in the previous session, as investors were encouraged by the coordinated effort of the European Central Bank and other central banks to provide liquidity to Europe’s banks.
Investors continued to turn their gaze to Europe as European finance ministers were meeting in Poland.
U.S. Treasury Secretary Timothy Geithner attended the meeting and urged the officials to show unity in combating Europe’s sovereign-debt crisis. Read more about meeting and Geithner.
Analysts at Barclays Capital anticipate further strengthening in demand.
“We expect U.S. oil demand to follow through an improving trajectory for the third quarter, in line with our economists’ view of improving prospects for the U.S. economy, relative to the second quarter,” the strategists said.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Virginia Harrison is a MarketWatch reporter based in Sydney.
