By Virginia Harrison, MarketWatch
SYDNEY(MarketWatch) — Crude-oil futures fell back below $95 a barrel in electronic trading Thursday, as investors weighed up comments from the Federal Reserve and the outlook for energy demand, and as a stronger dollar added pressure.
Crude for August delivery CL1Q -1.33% , shed $1.31, or 1.4%, to $94.08 a barrel on the New York Mercantile Exchange during Asian trading hours.
The fall was matched by declines in the broader commodity complex, after Federal Reserve Chairman Ben Bernanke said that the slowdown in the U.S. economy had been due to temporary factors but that other issues may persist into 2012. Read more about Bernanke’s remarks.
“The market is reassessing Bernanke’s comments in light of demand, and oil is coming under a bit of pressure,” said Jonathan Barratt, managing director at Commodity Broking Services in Sydney.
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Investors short the yuan
A contrarian group of investors believe that the outlook on China's economy is too optimistic, and hope to make millions by betting that the yuan will soon fall. (Photo: Reuters.)
”There will be a realignment of asset prices as people start to question whether prices should be at this level,“ Barratt said. “We feel crude prices remain weak, but we’re not going to rule out a technical correction.”
China’s manufacturing activity eased in June to its slowest rate of expansion in 11 months but stayed above the level signaling contraction, according to a survey published Thursday. Read more on China’s PMI.
More clarity on the health of the U.S. economy will be provided with weekly jobless claims and new home sales, due to be released Thursday.
The dollar index DXY +0.10% , which measures the U.S. unit against a basket of six other major currencies, rose to 75.068 from 74.784 late Wednesday. Read more about currencies.
The greenback tends to move inversely to dollar-priced commodities such as oil.
Also on the energy front, the EIA will issue a report on natural-gas stocks in storage on Thursday, covering the week ended June 17.
Virginia Harrison is a MarketWatch reporter based in Sydney.
