By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Benchmark U.S. crude-oil futures fell further from seven-month lows in electronic trading Thursday, as lingering worries about European debt troubles and expectations of data showing high inventories weighed on the commodity.
The July contract for light, sweet crude-oil CLN2 -0.07% gave up 21 cents, or 0.2%, to $87.61 a barrel, after sinking $2.94 in the regular New York Mercantile Exchange session Wednesday, amid raging worries about Spain and the outlook for the euro-zone.
The contract was on course to end May with losses in excess of 16%.
Thursday’s drop for Nymex futures came ahead of the U.S. Energy Information Administration’s weekly inventories data due later in the day.
Although data released by the American Petroleum Institute Wednesday showed inventories declined in the week to May 25, the closely watched EIA data was expected to “change that impression,” according to Tim Evans, energy analyst at Citi Futures Perspective.
“Overall OPEC oil production has been rising despite declining output from Iran, combining with seasonal global demand weakness, to create a supply/demand surplus,” said Evans, referring to the Organization of the Petroleum Exporting Countries.
“Statements from Saudi [Arabia] and other OPEC oil officials arguing that $100 per barrel represents a ‘fair value’ for Brent crude-oil have been backed by a level of production that steers the market toward that level,” he said.
The July futures for Brent UK:LCON2 -0.04% , Europe’s benchmark oil contract, settled at $103.47 a barrel on Wednesday
Elsewhere in the energy complex, the June gasoline RBM2 -0.46% contract was down 0.4% at $2.85 per gallon, while the heating-oil HOM2 +0.13% contract for the same month was unchanged at $2.74 per gallon.
July natural-gas futures NGN12 -0.66% climbed 0.8% to $2.44 per million British thermal units.
The energy complex’s performance came despite a mild drop for U.S. dollar, which would tend to support dollar-denominated oil prices. The ICE dollar index DXY -0.14% , a measure of the greenback’s performance against a basket of six other major currencies, stood at 82.995, weakening a bit from 83.053 in North American trade Wednesday.
Mild losses for U.S. equity futures also keep oil prices subdued, with Dow Jones Industrial Average DJIA -1.28% futures down 4 points at 12,377.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
