MW: Oil ends lower as strong dollar trumps Mideast
Friday’s macroeconomic data come in mixed
By Claudia Assis and Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) — Oil futures settled modestly lower Friday as investors continued to focus on political unrest in the Mideast and as the dollar strengthened.
Crude oil for May delivery (CLK11 105.52, -0.20, -0.19%) retreated 20 cents, or 0.2%, to settle at $105.40 a barrel on the New York Mercantile Exchange. That put weekly gains for oil at 4.2%, breaking a two-week string of losses.
Oil wavered between small gains and losses for most of Friday, supported by ongoing strife in the world’s top oil-producing region but hampered by the stronger dollar.
Prices stayed lower after a key gauge of consumer sentiment dropped to its lowest in five months.
Futures had already shown little reaction to news that fourth quarter U.S. real gross domestic product growth was revised up to 3.1% from an earlier estimate of a 2.8%.
Friday’s tepid gains and losses fit with “end-of-the-week book squaring,” said Bill O’Neill, a principal at Logic Advisors in New Jersey.
Crude, gold and other commodities followed a pattern of “early firmness and a late fading” consistent with investors reshuffling their portfolios ahead of the weekend, and the stronger dollar contributed to the late weakness, he added.
Weekly gains for the week were guaranteed earlier in the week, as crude also settled marginally lower on Thursday but soared to its best in 29 months on Wednesday.
“Continued fighting in Libya and protests in other Arab countries have given further support to oil prices, though additional impulses are currently lacking for any further rise of prices,” Commerzbank said in a note.
Analysts at J. P. Morgan raised their price expectation for Brent, the benchmark crude oil for Europe, saying they expect more supply disruptions.
“There is a strong likelihood of a price spike in the second quarter as the market demands additional oil to meet summer demand,” they said. They increased their second-quarter Brent price target to $118 a barrel, implying that the spot prices for oil “will spend some time over $120 (a barrel) and could even see intraday highs reaching $130 (a barrel),” the J. P. Morgan analysts said.
Brent for May delivery also wavered Friday, settling down 18 cents to $115.42 a barrel on ICE Futures in London.
In Yemen, leaders were reportedly negotiating the exit of longtime President Ali Saleh as thousands took to the streets to protest the government.
Antigovernment protests also rocked Syria, where protests continued to be met by deadly fire.
