Traders weigh U.S., Spain data; oil touches low of $85 a barrel
By Myra P. Saefong and V. Phani Kumar, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures veered between small gains and losses Friday, poised to log a loss for the week after briefly touching a low at $85 a barrel, as mixed data on the global economy failed to buoy prospects for demand.
Crude oil for December delivery CLZ2 -0.26% changed hands at $86.02 on the New York Mercantile Exchange, down 3 cents. It traded between $85 and $86.34, according to FactSet data.
Prices, which climbed 32 cents on Thursday, traded around 4.9% lower than a week ago.
Oil prices “have to hold the $85 level, otherwise more selling would very likely occur,” said Richard Hastings, a macro strategist at Global Hunter Securities.
“So far, the macro demand news is mixed, with not enough to push prices in any major direction,” he said. The “GDP data points were not meaningful enough, or new enough to give oil a catalyst in any direction, so the basic story is a trading range between $85 and $88 over the near term.“
Over in Spain, unemployment hit a fresh high, with the jobless rate in the third quarter rising to 25.02% from 24.63% in the second quarter. See: Spanish unemployment reaches 25%.
In the U.S, the economy sped up in the third quarter as consumers and the federal government boosted spending and home construction accelerated. Gross domestic product grew at a 2% clip from July through September, up from 1.3% in the second quarter. See: U.S. economy speeds up in the third quarter.
But the final reading of the University of Michigan/Thomson Reuters consumer sentiment indicator for October edged down to 82.6 from an initially reported 83.1, a bit worse than forecast.
The decline in oil futures came as U.S. equities saw mixed trading, with the Dow Jones Industrial Average DJIA -0.09% little changed, down 4 points.
Also Friday, the December contracts for gasoline RBZ2 +0.32% and heating oil HOZ2 +1.45% tacked on 0.2% to $2.68 a gallon and added 1.4% to $3.11 a gallon, respectively.
And natural gas for November delivery NGX12 -1.63% fell 1.9% to $3.37 per million British thermal units.
Despite a supply report from the Energy Information Administration on Thursday that was “essentially in line with expectations, participants chose to focus on subsequent weekly builds that will drive the overhang to a new record,” said Michael Fitzpatrick, editor in chief of the Kilduff Report.
Meanwhile, “Hurricane Sandy does not appear threatening (to natural gas production in the Gulf of Mexico), but another system, Tropical Storm Tony is churning out in the Atlantic and should keep any retreat in price contained heading into the weekend,” he said in a report.
Myra Saefong is a MarketWatch reporter based in San Francisco.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. William Watts in Frankfurt contributed to this report.
