MW: Oil declines as data fail to offer demand catalyst
Weekly natural-gas inventories rise
By Myra P. Saefong and Kristene Quan, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures fell Thursday, with a stronger dollar adding pressure as traders digested economic data from China and the U.S. for hints on global demand.
Also Thursday, the Energy Information Administration reported weekly inventories of natural-gas futures rose, with the figure coming in above expectations.
Crude oil for November delivery CLX2 -0.54% fell 44 cents, or 0.5%, to $91.67 a barrel on the New York Mercantile Exchange, but was off session lows.
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. See: 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 its leading U.S. economic index rose 0.6% in September after declining a downwardly revised 0.4% in August. See: Leading indicators jump in September.
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. See: Factories in Philadelphia improve a bit in October.
A firmer dollar also weighed on oil prices. The ICE dollar index DXY +0.06% , which measures the greenback against a basket of six other major currencies, rose to 79.170, 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.
Weekly natural-gas inventories rise
Elsewhere in the energy complex, natural-gas futures for November delivery NGX12 +0.55% turned higher by 1 cent, or 0.4%, to $3.48 per million British thermal units. Before reversing course, natural-gas futures extended losses after the EIA said inventories rose by 51 billion cubic feet for the week ended Oct. 12. Analysts polled by Platts expected a climb of between 46 billion cubic feet and 50 billion.
“The build continues a series of recent data that has been less sensitive to swings in temperature than anticipated, but with no clear larger pattern,” Citi analyst Tim Evans told clients Thursday. “This may simply be the erratic nature of demand during the ‘shoulder’ months, when heating and cooling demand is relatively low.”
Total stocks now stand at 3.776 trillion cubic feet, up 181 billion cubic feet from the year-ago level, and 249 billion cubic feet above the five-year average, the government said.
Heating-oil for November delivery HOX2 -0.36% fell 1 cent, or 0.3%, to $3.18 a gallon, and gasoline for delivery in the same month RBX2 -1.93% was down 6 cents, or 2.1%, at $2.72 a gallon.
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.
