MW: Crude-oil prices fluctuate after murky macro data
By Kate Gibson, MarketWatch
SAN FRANCISCO (MarketWatch) -- Oil prices swerved in and out of negative territory Tuesday after the day's two major pieces of macroeconomic news disappointed and stocks provided little direction for oil.
Crude-oil futures for September delivery lost 49 cents, or 0.6%, to $78.48 a barrel on the New York Mercantile Exchange. Oil had started floor trading in the black but lost steam as gauges for housing and consumer confidence spooked investors.
Consumer confidence fell in July on concerns about jobs and business conditions, following a sharp decline in June, the Conference Board said Tuesday. July's consumer confidence index fell to 50.4, its lowest level since February, from 54.3 in June.
The Standard & Poor's reported a 1.3% rise in prices of single-family homes in major metropolitan areas in the U.S., the second rise for the Case-Shiller index after six declines. A broader look at prices over the past year, however, does not indicate a recovery for the housing market, the index preparers said.
Stocks provided some meager support for oil. Equities opened higher and held on to gains after the data. Stocks have risen the past three sessions, reducing worries that the recovery is in jeopardy.
"Crude is showing strength on a new evaluation of our economy; growth is going to be slow, but we're taking away that double-dip scenario," said Jeffrey Friedman, senior market strategist at Lind-Waldock.
The contract held flat to end at $78.98 on Monday.
Should the S&P 500 Index (SPX 1,111, -3.92, -0.35%) close above 1,122 to 1,125 two days in a row, then crude would likely follow suit and close above $80.50, Friedman predicts.
Investors should also keep their eyes trained on the euro zone, the analyst advised, saying that if the euro falls sharply, it's a signal that people are afraid.
"People are willing to take risks as long as the euro is rallying and the dollar is weaker. In trading you should look at more than one market to get confirmation," Friedman said.
The euro most recently changed hands at $1.299. The dollar index (DXY 82.30, +0.21, +0.26%) , which compares the U.S. unit with a basket of six currencies, recouped earlier losses and traded 0.1% up at 82.20.
Traders were also keying in the first batch of weekly inventories. Crude-oil stockpiles have expanded or declined less than expected in recent weeks, indicating lackluster demand.
The American Petroleum Institute reports weekly supply data at 1:30 p.m. Eastern on Tuesday, while the Energy Department issues its more closely watched report Wednesday.
