Supply data from trade group points to bearish numbers for energy products
By Claudia Assis and Nick Godt, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures fell on Thursday after supply data from a U.S. industry group raised concerns about demand, even as tensions between Iran and western nations continued to provide a floor to prices.
Crude oil for February delivery CL2G -0.42% fell 69 cents to $102.50 a barrel on the New York Mercantile Exchange, looking set to end a two-day winning streak and retreat from Wednesday’s eight-month high.
Positive data on the U.S. jobs front did little to change that prospect.
Earlier Thursday, payrolls processing firm ADP said U.S. payrolls gained 325,000 jobs in December. Read more about the ADP data.
Weekly jobless claims dropped 15,000 to 372,000 in the last week, the U.S. Labor Department said. Read about jobless claims.
A stronger dollar contributed to oil’s fall, however. The euro traded at a 15-month low on concerns about European bank capital and a French bond auction got a lukewarm reception. Read about Thursday’s currencies action.
To complete their puzzle, investors were mostly waiting for official inventories data. The Energy Information Administration was scheduled to release the numbers at 11 a.m. Eastern.
The American Petroleum Institute late Wednesday said crude inventories fell 4.4 million barrels in the week ended Dec. 30. But the trade group also said gasoline inventories rose 3.4 million barrels and stockpiles of heating oil rose 5.2 million barrels.
The rising stockpiles in product inventories were “net bearish overall” for the market, said J.P. Morgan analysts in a note.
“The rapid rate at which inventories have climbed reflect the supply/demand forces at work,” they said, adding that these trends could also accelerate given warm weather and seasonally weak gasoline demand in January.
Oil gained 4.4% over two sessions as Iran signaled it might close off passage through the Strait of Hormuz in retaliation for economic sanctions from the U.S. and Europe announced over the weekend.
Other energy futures were also lower, with February gasoline RB2G -0.37% down 2 cents to $2.77 a gallon.
Heating oil for the same month’s delivery HO2G -0.48% fell 2 cents to $3.07 a gallon. February natural gas NG12G -2.55% declined 7 cents to $3.05 per million British thermal units.
