MW: Oil futures fall as traders brace for supply climb
EIA’s weekly oil report due after API reports big rise in oil supply
By Myra P. Saefong and Carla Mozee, MarketWatch
SAN FRANCISCO (MarketWatch) — Oil futures fell Wednesday as traders braced for government data that are likely to show a sizable climb in last week’s supplies after a trade group reported an increase that was nearly double what analysts had anticipated.
Disappointing growth in U.S. private-sector payrolls also weighed on sentiment.
Crude for May delivery CLK3 -0.80% fell 51 cents, or 0.6%, to $96.68 a barrel on the New York Mercantile Exchange.
The loss came after the American Petroleum Institute said late Tuesday that crude supplies rose 4.7 million barrels in the week ended March 29. Analysts had expected a climb of 2.5 million barrels, according to a Platts survey of analysts.
The API also said gasoline inventories dropped 5.0 million barrels, compared with expectations for a fall of 1.25 million barrels. Distillate stockpiles fell by 1.85 million barrels, more than the 1 million-barrel decline expected by analysts. The API data arrived ahead of the more closely watched report from the U.S. Energy Information Administration.
The market will be looking for confirmation of the API numbers in the EIA’s weekly petroleum report at 10:30 a.m. Eastern, according to James Williams, energy economist at WTRG Economics. “The EIA carries more weight than API with traders.”
Still, the API stockpiles figures underscored demand concerns in the wake of recent weak manufacturing data in the U.S. and Europe.
Recent data showed that activity in factories across the euro zone contracted at a faster pace in March and in the U.S., the Institute for Supply Management’s factory index unexpectedly fell.
Early Wednesday, Automatic Data Processing Inc. reported that private-payroll growth slowed in March, posting the smallest gain since October.
“But Friday’s release of official employment numbers will have more influence than the ADP data,” said Williams.
On Tuesday, oil futures turned higher late in the regular session, leaving the May contract up 12 cents, or 0.1%, at $97.19 a barrel. It spent much of the session below the $97 level, with pressure from a stronger U.S. dollar DXY -0.25% .
The greenback traded a bit lower against most of its currency rivals Wednesday, offering some support for oil prices. A weaker greenback tends to help lift prices of dollar-denominated commodities such as oil because they become cheaper to buy for holders of other currencies.
Also on Nymex, May gasoline futures RBK3 -1.10% slipped 1 cent, or 0.4%, to $3.03 a gallon, while May heating oil HOK3 -0.53% traded at $3.08 a gallon, down 1 cent, or 0.3%.
May natural gas NGK13 -0.23% slipped half a cent, or 0.2%, to $3.96 per million British thermal units, after losing 1.2% in the previous session.
Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.
Carla Mozee is a reporter for MarketWatch, based in Los Angeles. Follow her on Twitter @MWMozee.
