MW; Oil futures fall, tracking U.S. stock futures lower
Oil futures declined 4% Friday, after their strong rally in the previous session, as falling U.S. stock futures and economic concerns dented investor sentiment.
Crude oil for March delivery dropped $1.48, or 4%, to $38.00 a barrel in electronic trading on Globex. Earlier, the contract, which expires at the end of trading today, hit an intraday low of $37.44 an ounce.
Trading more actively, April crude dropped $1.53, or 4%, to $38.65 a barrel on Globex.
"This morning, fears over a deteriorating global economic outlook sent equity markets tumbling in Asia and Europe, as investors shed riskier positions, with oil prices tracking them lower amid weakening demand concerns," said Nimit Khamar, an analyst at Sucden Financial Research.
U.S. futures were indicating a rough finish to the week for Wall Street on Friday, after the Dow industrials closed below the key 7,500 level in the previous session and with plenty of gloomy news to keep buyers at bay ahead. See Indications.
"Disappointing eurozone PMI data highlighted remaining downside risks to growth this morning, and without a lasting stabilization in confidence, energy prices are likely to remain under pressure," said analysts at Action Economics.
The preliminary Markit euro-zone manufacturing purchasing managers index, or PMI, fell to a record low of 33.6 in February from 34.4 in January, defying forecasts for a rise to 35. Read more.
On Thursday, oil jumped 14%, marking the biggest one-day gain since the end of last year, after U.S. inventories showed a surprise decline last week as consumption started picking up.
Crude inventories fell by 200,000 barrels last week, the Energy Department reported. Most analysts were expecting a buildup of 2 million to 4 million barrels.
Also on Globex, March reformulated gasoline fell 5 cents to $1.05 a gallon and March heating oil dropped 4 cents to $1.16 a gallon.
March natural gas futures fell 9 cents, or 2%, to $3.99 per million British thermal units.
Elsewhere in the commodity markets, gold futures soared as high as $998.50 an ounce Friday, as investors sought safety in the precious metal.
