MW: Oil drops as data fails to offer demand impetus
By Myra P. Saefong and Kristene Quan, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures fell Thursday, with a stronger dollar adding pressure as traders eyed economic data from China and the U.S. for hints on global demand.
Crude-oil for November delivery CLX2 -1.14% fell $1.15, or 1.3%, to $90.97 a barrel on the New York Mercantile Exchange.
Oil futures have been trading relatively flat since Friday. They gained 3 cents Wednesday as a jump in U.S. housing starts offset a surprisingly large rise in U.S. crude-oil inventories. Read: Oil holds at $92 as supply rises, dollar falls.
The “economic-data deluge out of China overnight” failed to “breathe some life into this crude complex,” said Matt Smith, commodity analyst at Schneider Electric, in a report. “But even better-than-expected retail sales and industrial production combined with an in-line print for GDP [in China] last quarter has not been enough to resuscitate this market.”
The country’s gross domestic product cooled to 7.4% in third quarter, as expected, down from 7.6% in second quarter. See: China GDP growth slows but may mark bottom.
“The Chinese data was nothing extraordinary while we continue to mostly consolidate after the correction earlier in the week,” said Andrey Kryuchenkov, analyst at VTB Capital.
Meanwhile, U.S. jobless claims have “unwound last week’s seasonally-boosted strong number to correspondingly under-deliver today, with a mucho-larger number of claims than expected,” Smith said. “That has knocked the wind out of WTI, and prices are retracing.” See: U.S. initial jobless claims jump to 388,000.
Also Thursday, the Conference Board said that its leading U.S. economic index rose 0.6% in September after declining a downwardly revised 0.4% in August.
And the Federal Reserve Bank of Philadelphia said the Philly Fed diffusion index rose to 5.7 in October — the first positive reading after five straight monthly readings below zero.
A firmer dollar also weighed on oil prices. The ICE dollar index DXY +0.19% , which measures the greenback against a basket of six other major currencies, rose to 79.179, up from 79.022 in late North American trade Wednesday.
The U.S. currency tends to move inversely to dollar-denominated crude, as a stronger greenback makes oil more expensive for holders of other currencies.
Elsewhere in the energy complex, heating-oil for November delivery HOX2 -0.87% fell 3 cents, or 0.9%, to $3.16 a gallon, and gasoline for delivery in the same month RBX2 -2.40% was down 7 cents, or 2.4%, at $2.71 a gallon.
Natural-gas futures for November delivery NGX12 -0.35% shed 1 cent, or 0.4%, to $3.46 per million British thermal units.
The Energy Information Administration will provide its weekly update on natural-gas supplies shortly.
Analysts polled by Platts expect the data to show an increase of 46 billion to 50 billion cubic feet for the week ended Oct. 12.
Myra Saefong is a MarketWatch reporter based in San Francisco.
Kristene Quan is a MarketWatch reporter, based in Hong Kong. Sara Sjolin in London contributed to this report.
