FX:Crude Oil Futures Down on Stronger Dollar, Demand Concerns
Crude oil futures fell in Asian trading Monday, pulled down by a stronger U.S. dollar and warnings from the Organization of the Petroleum Exporting Countries oil cartel about risks to global oil demand.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at $95.21 a barrel at 0633 GMT, down $0.83 in the Globex electronic session. June Brent crude on London's ICE Futures exchange fell $0.79 to $103.12 a barrel.
A report in The Wall Street Journal that the U.S. Federal Reserve has drawn up a strategy for winding down its bond-buying efforts boosted the dollar, which in turn weighed on crude oil and other commodities.
The drop came after prices for both benchmarks ended last week on a bearish note, with OPEC warning that slowing growth in China and economic weakness in the euro zone are threatening to slow the global economy.
Industrial output in China rose 9.3% in April from a year earlier, data China's National Bureau of Statistics showed Monday. While the increase marked an acceleration from the previous month, it was slightly below analysts' expectations. Oil prices didn't react much to the figure.
Moderating growth in China has affected its demand for oil. Chinese refiners processed 9.36 million barrels a day in April, 3% lower than in March, but up 2.5% from a year earlier, according to data released Monday.
The macro-economic environment has turned positive in the past week, boosting stock indices across the globe, but "this is likely to only support [oil] prices at current levels at best, rather than propel a complete upward retracement," analysts Barclays said.
In reaction to the more bullish environment, hedge funds and other money managers boosted their bets on crude oil for the second time in a row during the week ended May 7, the Commodity Futures Trading Commission reported. The net long position in Nymex crude oil futures and options rose 5.5% to 204,534 contracts.
On the supply side, OPEC said Friday it raised production in April by 300,000 barrels a day to a five-month high of 30.5 million barrels a day.
Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--fell 161 points to $2.8442 a gallon, while June heating oil traded at $2.8885, 177 points lower.
ICE gasoil for June changed hands at $858.75 a metric ton, up $7.00 from Friday's settlement.
