Crude-oil futures plunged in Asia Friday despite encouraging economic news from China and Japan, as the U.S. Federal Reserve failed to meet expectations of a stimulus plan to support the world's largest economy.
In his testimony to Congress, Federal Reserve Chairman Ben Bernanke cited significant risks to the U.S. economic recovery but stopped short of signaling whether the central bank would take new measures to stimulate growth.
Mr. Bernanke's comments more than offset positive sentiment stemming from the Chinese central bank's surprise decision Thursday to cut interest rates for the first time since December 2008. Although the cut boosted sentiment at first, it also highlighted concerns about the slowdown in the world's second-largest economy.
Nymex crude lost nearly a fifth of its value in May due to concerns over a slowing global economy. The benchmark snapped a three-day winning streak overnight, losing 0.2%, and accelerated its losses in Asian trading on Friday.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $82.75 a barrel at 0635 GMT, down $2.07 in the Globex electronic session. July Brent crude on London's ICE Futures exchange fell $1.72 to $98.21 a barrel.
The drop came despite Japan posting strong first-quarter GDP growth earlier Friday, with data showing gross domestic product grew a price-adjusted 4.7% in annualized terms during the first quarter compared with an initial reading of 4.1%. However, Japan's current account surplus was a disappointing Y333.8 billion in April before seasonal adjustment.
Investors will turn to China's Consumer Price Index, industrial production and trade data for May, which are due Saturday and Sunday.
"Few market participants will want to enter the weekend carrying large positions ahead of the May Chinese data," analysts at ANZ said in a note.
Chief Executive Christophe de Margerie of French oil major Total SA's (TOT) said Friday that oil markets are well-balanced.
"The fundamentals plead for higher oil prices, as underlying demand is still high and the geopolitical tensions are higher than ever," Mr. de Margerie told Dow Jones Newswires, adding that the Organization of Petroleum Exporting Countries may step in to support prices.
"OPEC has all the means to prevent oil prices falling too low," Mr. de Margerie said.
The oil ministers of member countries are scheduled to meet next week in Vienna to assess the market situation.
Nymex reformulated gasoline blendstock for July--the benchmark gasoline contract--fell 394 points to $2.6456 a gallon, while July heating oil traded at $2.6381, 290 points lower.
ICE gasoil for June changed hands at $848.25 a metric ton, down $10.50 from Thursday's settlement.
Write to Jacob Gronholt-Pedersen at jacob.pedersen@dowjones.com
