Natural gas falls more than 3% after inventories data
By Claudia Assis and Michael Kitchen, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures extended their advance Thursday after weak Chinese manufacturing data raised hopes for fresh stimulus moves from Beijing, but lower U.S. stocks kept a lid on gains.
Oil for October delivery CLV2 +0.32% advanced 46 cents, or 0.5%, to $97.72 a barrel on the New York Mercantile Exchange.
Prices on Wednesday settled at their highest since early May, helped along by a larger-than-expected drop in supplies. Read more on Wednesday’s oil trade.
Crude futures took off after HSBC reported that a preliminary reading of its August manufacturing survey index for China hit a nine-month low, with measures of shipments and new orders especially weak.
The numbers prompted some analysts to predict that Chinese officials would add stimulus to support the economy.
“Regarding policy impact, we expect the Chinese government to step up policy easing/stimulus after August,” said Bank of America Merrill Lynch economist Ting Lu. Read more on HSBC China manufacturing data.
Oil traded as high as $98.17 after the data.
Oil also enjoyed a boost from a weaker U.S. dollar, as the ICE dollar index DXY -0.27% was down to 81.299, from 81.939 level in late North American trading on Wednesday and continuing to lose ground as the session progressed.
The dollar weakened Wednesday after minutes from the Federal Reserve’s latest policy meeting showed higher odds that the central bank will take further measures to boost growth. That weakness persisted on Thursday. Read more about currencies.
Some pressure came for oil as U.S. stocks traded modestly lower, and a gauge of initial jobless claims showed first-time requests for unemployment benefits slightly rising on the past week.
Traders also digested new sales of new U.S. single-family homes rose 3.6% in July, more than expected. See more about sales of new homes.
Meanwhile, other energy futures were mixed, with natural-gas futures lower ahead of supply data of their own.
Heating oil for September delivery HOU2 +0.74% added 3 cents, or 0.9% to $3.16 a gallon, while September gasoline RBU2 +0.49% advanced 2 cents, or 0.5%, to $3.12 a gallon.
Natural gas for September delivery NGU2 -3.61% was off 10 cents, or 3.4%, to $2.73 per million British thermal units.
Futures extended losses after the Energy Information Administration earlier Thursday reported a larger-than-expected increase in natural-gas inventories.
The EIA reported an increase of 47 billion cubic feet in the week ended Aug. 17.
Analysts polled by Platts had expected an increase between 36 billion cubic feet and 40 bcf for the week.
The rise of 47 bcf compared with a 66-bcf build in the corresponding week of 2011 and a five-year-average of an increase of 53 bcf.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
