MW: Oil reaches for first monthly gain since March
By Carla Mozee, MarketWatch
LOS ANGELES (MarketWatch) — U.S. crude-oil futures rose Friday, with the commodity headed for its fifth straight winning session and set to close the month on a positive note.
Crude for August delivery CLQ3 +0.56% rose 38 cents, or 0.4%, to $97.43 a barrel in electronic trade. Oil was poised to post a weekly gain of 3.6%, according to FactSet data.
Oil prices are on track in June for a rise of 5.5%, which would mark their best monthly performance since a 5.6% advance in March.
Prices in June had “relatively weathered the storm amid a steep sell-off in various commodities and asset classes,” IIFL analyst Hitesh Jain told clients this week.
Gold is among the commodities that have suffered in June, with price futures down roughly 24%.
Jain noted, though, that while tensions in the Middle East and strong U.S. macroeconomic figures “are providing support to the complex, prices have failed to surpass $99 a barrel.”
Oil on Thursday climbed 1.6% on the New York Mercantile Exchange, with prospects for energy demand aided by reports that U.S. consumers spent and earned more in May, and that the number of people who applied for unemployment benefits last week fell, pointing to a slightly slower pace of layoffs.
Later Friday, investors will monitor speeches to be delivered by Federal Reserve officials, as well as Chicago PMI and consumer sentiment data.
Oil futures were still slightly lower for the second quarter, down by 0.2%.
Energy prices “seem vulnerable at higher levels, as dynamics in oil markets are changing on account of surge in global oil output,” wrote IIFL’s Jain. Growth in global oil demand remains subdued regardless of improving economic conditions in the U.S., and pessimism in China and Europe remain as headwinds, he said.
“Considering the multitude of factors, we believe that oil prices will persist with the familiar price range of $92-$98 a barrel in the coming weeks and eventually drift lower below $90 a barrel,” he wrote.
Elsewhere, August futures for Brent crude UK:LCOQ3 +0.41% rose 19 cents, or 0.2%, to $103.01 a barrel, looking at their fifth straight gain. Brent futures were up more than 2% in June, but down 6.5% on a quarterly basis.
Natural gas for August delivery NGQ13 +0.70% picked up 2 cents, or 0.5%, to $3.60 per million British thermal units, ahead of its expiration this week. On Thursday, the futures tumbled 4.3% after a weekly report showed a larger-than-expected increase of 95 billion cubic feet in U.S. inventories for the week ended June 21.
Analysts polled by Platts had forecast a net addition between 88 billion cubic feet and 92 billion cubic feet.
August heating oil HOQ3 +0.38% tacked on 1 cent, or 0.2%, to $2.89 a gallon, while August gasoline RBQ3 +0.13% was unchanged at $2.73 a gallon.
Carla Mozee is a reporter for MarketWatch, based in Los Angeles. Follow her on Twitter @MWMozee.
