BLBG:Oil Fluctuates After Biggest Drop in Two Weeks on Jobs, Supplies
Oil traded little changed after sliding the most in two weeks as worse-than-forecast employment data underscored weakness in the global economy and U.S. crude stockpiles increased to the highest level in 21 years.
Futures swung between gains and losses in New York after slipping 0.9 percent yesterday. Prices declined as data showed U.S. employers added fewer jobs than predicted last month while unemployment in Germany unexpectedly increased. Crude supplies in the U.S., the world’s biggest consumer of the commodity, rose to the most since September 1990, according to a report from the Energy Information Administration. Fuel stockpiles fell more than analysts projected in a Bloomberg News survey.
“Investors are unsure about the recovery,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity- markets newsletter in Sydney. Crude “inventories continue to build, but we continue to see a draw in the products and that is indicative of the amount of demand that’s out there,” he said.
Crude for June delivery was at $105.13 a barrel, down 9 cents, on the New York Mercantile Exchange at 1:38 p.m. Singapore time. The contract yesterday slid 94 cents to $105.22, the lowest close since April 30. Front-month prices are 6.4 percent higher this year.
Brent oil for June settlement was at $118.31 a barrel, up 11 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $13.16, compared with $12.98 yesterday.
‘Potential Slowdown’
“Disappointing economic data from Europe and the U.S. suggested a potential slowdown in the recovery process,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. (ANZ) in Melbourne, said in a note today. “U.S. crude prices didn’t respond as bearishly as we would have expected to the additional negative data that showed yet another rise in EIA crude stocks, perhaps already having priced-in a softer demand outlook a couple weeks ago.”
U.S. crude stockpiles rose 2.8 million barrels last week to 375.9 million, the EIA report showed. They were forecast to climb 2.5 million barrels, according to a Bloomberg News survey.
Gasoline supplies dropped 2 million barrels. They were projected to fall 1.5 million barrels, according to the median estimate of 11 analysts in the Bloomberg survey. Distillate stockpiles, a category that includes heating oil and diesel, slid 1.9 million barrels compared with an expected 350,000 barrel decline, according to the EIA.
Inventories at Cushing, Oklahoma, the delivery point for the New York oil contract, rose 1.21 million barrels to a record 43 million, the report showed. Stockpiles at the hub have climbed 13 of the last 15 weeks.
U.S. Employment
Private employment in the U.S. increased by 119,000 in April, the smallest gain in seven months, after rising by 201,000 in March, ADP Employer Services said yesterday. The median forecast of economists surveyed by Bloomberg News called for a 170,000 increase.
German unemployment unexpectedly rose in April. The number of people out of work increased a seasonally adjusted 19,000 to 2.87 million, the Nuremberg-based Federal Labor Agency. Economists had forecast a decline of 10,000. New Zealand’s jobless rate climbed to the highest level since 2010.
Oil in New York traded little changed as technical indicators showed investors may be unsure of the direction for short-term prices. Futures yesterday traded within the previous day’s range, creating a consolidation pattern known as an “inside day,” according to data compiled by Bloomberg. Crude has technical support along the middle Bollinger Band, around $104.05 a barrel today.
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 at akwiatkowsk2@bloomberg.net
