By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — Crude-oil futures rebounded in electronic trading Friday as U.S. inventories data showing a larger-than-expected drop in stockpiles helped the commodity recover from the sharp losses suffered in the wake of the European Central Bank disappointment.
But natural-gas prices slipped further after plunging nearly 8% overnight, weighed by an even larger increase in inventories than analysts expected.
Light, sweet crude-oil futures for delivery in September CLU2 +1.09% rose 36 cents, or 0.4%, to $87.49 a barrel on Globex, after dropping $1.78 in the regular New York Mercantile Exchange session overnight.
However, September natural-gas futures NGU12 -0.21% fell 0.2% to $2.91 per million British thermal units after Thursday’s plunge.
Friday’s moves followed data from as Energy Information Administration a surprisingly sharp fall of 6.5 million barrels in U.S. crude-oil inventories. Natural-gas supplies, however, jumped 28 billion cubic feet in the week to July 27, compared to analyst estimates for an increase of 21 bcf.
“Macroeconomic worries associated by the lack of new policy moves from the [Federal Open Market Committee], Bank of England and ECB offset to at least some degree by the larger-than-expected [drop in crude inventories],” said Tim Evans, an energy sector analyst at Citi Futures.
Thursday’s sell-down in crude reflected hurt investor sentiment after the ECB held interest rates steady and didn’t announce any plan to restart purchases of Spanish and Italian bonds, upsetting investors who had been hoping for some action from the central bank to stem the region’s debt crisis.
The Bank of England also left its interest rates untouched on Thursday, while the U.S. Federal Reserve also stood pat a day before.
As for natural gas, Evans said: “The larger-than-expected 28 bcf build in stocks for last week implies some weakening of the background supply/demand balance when adjusted for weather, and our suspicion is that some incremental power-sector demand has been met from coal rather than natural gas.”
Among other energy products, September futures for gasoline RB 0.00% were little changed at $2.87 per gallon, while those for September heating-oil HO 0.00% rose 0.2% to $2.85 per gallon.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
