EG: OIL FUTURES: Crude Pauses After Three-Day Selloff
--Crude pauses after three-day selloff
--Futures down 7% this week in selling spree
--Weak China manufacturing data overnight
By Dan Strumpf
NEW YORK--Oil futures were little changed Thursday, as traders paused following this week's breathless three-day selling spree.
Benchmark U.S. crude has fallen about 7% this week in a selloff triggered by mounting concerns about global oil demand and a jump in U.S. oil stockpiles. U.S. and European crude futures settled at their lowest level since early August on Wednesday.
"People are still trying to figure out where solid ground is," said Carl Larry, head of the oil-trading advisory service Oil Outlooks & Opinions in New York.
Light, sweet crude for October delivery fell 31 cents, or 0.3%, to $91.67 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe rose 55 cents, or 0.5%, to $108.74 a barrel.
Futures were little moved by the latest central bank stimulus measure, this time by the Bank of Japan. The central bank of the world's third-largest oil consumer announced Wednesday that it would expand the size of its asset-purchase program to Y80 trillion from Y70 trillion and extended its program until the end of next year.
The move comes a week after the U.S. Federal Reserve announced a third round of bond buying, this time an open-ended $40 billion-a-month program.
But oil markets widely shrugged off that measure as well. Nymex crude briefly shot to $100 a barrel in the wake of the move. But prices sold off in the following days, amid doubts over the Fed's effectiveness in promoting growth.
"The veracity of this week's selling also leaves open the possibility of an assertive run at the $90 mark in short order," said Jim Ritterbusch, head of oil trading advisory firm Ritterbusch & Associates.
Analysts continue to note that economic growth--closely correlated to oil demand--remains tepid. China, the world's No. 2 oil consumer, reported weaker manufacturing data overnight. The country's preliminary September purchasing managers index came in at 47.8, indicating another month of shrinking activity. Europe also reported a similarly weak figure.
Meanwhile, the latest signals show oil supply remains ample. Saudi Arabia repeated its view that $100 a barrel represents a fair price for Brent crude, and said it plans to keep production high to meet demand.
On Wednesday, the Energy Information Administration said U.S. oil stockpiles rose last week by 8.5 million barrels--compared with an expected increase of just 500,000 barrels. Imports surged 1.28 million barrels a day, while U.S. oil demand fell. The report triggered a 3.5% selloff in crude on Wednesday.
Front-month October reformulated gasoline blendstock, or RBOB, recently rose 4.67 cents, or 1.7%, to $2.8753 a gallon. October heating oil rose 2.29 cents, or 2.8%, to $3.669 a gallon.
