By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — Oil futures shrugged off solid gains for Asian stocks to trade lower in electronic action Thursday amid demand concerns.
Benchmark U.S. crude oil for May delivery CLK3 -0.06% lost 38 cents, or 0.4%, to trade at $94.26 a barrel, giving back almost half of its 44-cent gain during Wednesday’s New York Mercantile Exchange session.
Likewise, rival London-traded benchmark Brent crude saw its May contract UK:LCOK3 0.00% retreat another 30 cents, or 0.3%, to $105.48 a barrel, extending the previous day’s 44-cent drop.
Citi Futures said the Wednesday advance for Nymex crude was due to the day’s equity rally on Wall Street and a smaller-than-expected rise in U.S. crude inventories, as seen in the weekly Energy Information Administration report.
But limiting gains — and spurring Brent’s loss — was a modest cut to the Organization of the Petroleum Exporting Countries’ global oil-demand forecast.
The OPEC report, which came after Asia business hours, weighed on oil Thursday.
Overall, the Citi Futures analysts, who have long been bearish on crude, said there was certainly enough supply to cover current global energy demand.
“There is no physical tightness to limit the downside in crude oil during periods of speculative-long liquidation,” they wrote in a note Thursday, advising clients to short Nymex crude with a protective buy-stop at $108.40.
The losses for Nymex and Brent crude Thursday came despite a mild weakening for the U.S. dollar, which is normally a positive for oil and other dollar-denominated commodities.
By the East Asian afternoon, the ICE dollar index DXY -0.36% , which measures the U.S. unit against six rivals, was at 82.480, down from 82.508 late Wednesday in North America.
Among other energy futures, May gasoline RBK3 +0.15% consolidated after its 2.6% tumble Wednesday, edging fractionally higher in Asian trade to sit at $2.87 a gallon.
The contract had sold off during regular Nymex trade due to an unexpected increase in stockpiles shown in the EIA’s weekly report.
May heating oil HOK3 -0.05% shed a penny, or 0.2%, to $2.94 a gallon, while May natural gas NGK13 +0.59% added another 4 cents, or 1.1%, after its 7-cent advance Wednesday to sell at $4.13 per million British thermal units.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles. You can follow him on Twitter at @KitchenNews.
