FX: OIL FUTURES: Crude Weaker Amid Mixed Global Economic Signals
NEW YORK – Crude oil prices were lower early Wednesday amid mixed signs about the state of the global economy and prior to a wide-watched U.S. oil inventory report.
Traders said data released this week from the U.S. and China, the world's two biggest oil consumers, showed improvement in the manufacturing sector, suggesting rising demand for oil.
The U.S. ISM's manufacturing purchasing managers' index rose to 54.8 in April from 53.4 to reach its highest level since June last year. China's official PMI, meanwhile, came in at 53.3, up from March's reading of 53.1.
But fresh data from the euro-zone countries showed the manufacturing sector shrank in April at the fastest pace in nearly three years. March unemployment in the euro zone tied the record high hit 15 years earlier.
Meantime, there were fresh signs that job growth in the U.S. private sector remains anemic. A national employment report calculated by payroll processor Automatic Data Processing Inc. (ADP) and consultancy Macroeconomic Advisers showed just 119,000 private sector jobs were added last month, far below economists' expectations of growth of 175,000 jobs.
"The job number wasn't great and we're drifting off," said Tom Bentz, director at BNP Paribas Prime Brokerage, a day after prices settled at a one-month high and looked poised for further gains. "European has been the drag on all the markets."
Light, sweet crude oil for June delivery on the New York Mercantile Exchange was down 42 cents at $105.74 a barrel. ICE June Brent was 57 cents lower, at $119.09 a barrel.
U.S. weekly inventory data, due out at 10:30 a.m. EDT, is expected to show crude oil stocks rose by 2.1 million barrels last week, while refiners boosted operations by 0.4 percentage point, according to a survey of analysts by Dow Jones Newswires.
The Energy Information Administration data also is expected to show gasoline stocks fell 900,000 barrels and distillate stocks (heating oil and diesel) dropped by 300,000 barrels.
Late Tuesday, the American Petroleum Institute, an industry group, released its report, which showed crude stocks rose 2.035 million barrels last week, while refiners lifted operations by 1 point. Gasoline stocks fell 3.898 million barrels and distillate inventories fell 4.176 million barrels, API said.
Traders said prices could rally later Wednesday if the EIA data confirm the large declines in gasoline and distillates that the API reported.
Reformulated gasoline blendstock futures for June delivery were down 0.19 cent, at $3.0952 a gallon, while June heating oil futures were down 0.83 cent, at $3.1688 a gallon, both above session lows.
