FOX: OIL FUTURES: Nymex Crude Inches Lower on Demand Worries
Crude-oil futures eased below Friday's two-week high as concerns about global economic growth and weak oil demand persisted.
Light, sweet crude for September delivery was recently down 63 cents, or 0.7%, at $90.77 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe fell 88 cents, or 0.8%, to $108.06 a barrel.
Prices soared nearly 5% Friday after the Labor Department reported that the U.S. added 163,000 jobs in July, outpacing the expected gain of 95,000. New jobs could mean increased demand for gasoline and other oil-based goods.
However, demand for oil may not rise as much as some traders expect, said Tim Evans of Citi Futures Perspective in a note to clients. "The U.S. economy has been becoming more energy efficient," he said. "Those banking on economic growth to lead to strong physical demand have so far been disappointed."
Friday's rally was supported by the weaker dollar, which fell as optimistic traders rushed out of the dollar into riskier assets. Because oil is traded in dollars, it becomes more affordable to buyers using other currencies when the dollar is weak.
On Monday, the dollar regained some strength and was trading near flat, as investors refocused on weakness in the euro zone. The Wall Street Journal Dollar Index, which tracks the greenback against a basket of other currencies, was recently up 0.04% at 71.491.
"While sentiment is positive for now, it remains fickle," said Barclays' Miswin Mahesh of oil futures in a note to clients.
Investors are continuing to watch the Federal Reserve and European Central Bank for clues of further stimulus actions. Both central banks failed to announce new measures to strengthen regional economies last week, disappointing hopeful traders and weighing on oil prices.
Meanwhile, investors are less concerned Monday morning that a tropical storm will threaten oil supplies in the Gulf of Mexico this week. Tropical Storm Ernesto is headed south of the Gulf, and a tropical depression located farther offshore is expected to weaken in the next few days, according to the National Hurricane Center.
Front-month September reformulated gasoline blendstock, or RBOB, recently fell 4.51 cents, or 1.5%, at $2.8859 a gallon. September heating oil fell 9.3 cents, or 0.3%, at $2.9168 a gallon.
Write to Nicole Friedman at nicole.friedman@dowjones.com
