WSJ: OIL FUTURES Nymex Crude Holds Steady In Tight Trading Range
By Jerry A. DiColo Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Crude futures held steady Thursday, consolidating near the middle of a narrow trading range as traders look for signals on the strength of the economy.
Light, sweet crude for September delivery recently traded 3 cents higher at $77.02 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 17 cents higher at $76.23 a barrel.
Oil prices have moved conservatively in recent days, settling between $76 and $79 a barrel in 10 of the last 11 trading sessions. On Wednesday, the Department of Energy reported a 7.3-million-barrel increase in U.S. inventories that initially sent crude lower, helped by a weak report by the Commerce Department that said durable goods ordered slid for the second-straight month. But prices bounced back as traders digested the energy department's numbers, attributing the large build to shifting delivery schedules due to Tropical Storm Bonnie.
The market remains flush with oil, but futures prices have been buoyed by a slow rise in equities markets this month, which have served as a proxy for future economic growth, and oil demand. Mixed government data have also indicated that the economy continues to grow, though at a slower pace, leaving traders cautious about moving out of a recent trading range between $70 and $80 a barrel until more substantial signals about demand emerge.
Dow Jones Industrial Average futures were recently up 60 points to 10,508.
"Crude has been looking very tired, like it's run out of steam," said Matt Smith, of Summit Energy. He said prices have again reverted to hanging around the 200-day moving average, which currently stands at $77.08 a barrel.
For several weeks, $80 has served as both a technical and psychological hurdle for crude. Traders tested the level as recently as Tuesday, with prices rising as high as $79.69 before falling back below $78. Flush supplies have the market worried about moving higher even as fewer fears of a double-dip recession keep crude from a steep decline.
And data on oil inventories is providing a mixed picture. The huge rise in U.S. crude stockpiles was balanced by rising demand for oil products, particularly gasoline. Demand topped 9.6 million barrels a day in the energy department's figures, the highest in any week since August, 2007.
"In the big picture, we are still trading sideways, and there's nothing to push us one way or the other," said Carl Larry, an analyst with Oil Outlooks and Opinions.
Front-month August reformulated gasoline blendstock, or RBOB, recently traded 0.01 cent higher at $2.0635 a gallon. August heating oil recently traded 0.51 cent higher at $2.0015 a gallon. Both contracts settle Friday.
-By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155; jerry.dicolo@dowjones.com.
