MW: Oil drops on supply-data jitters, equity retreat
By Barbara Kollmeyer and V. Phani Kumar, MarketWatch
MADRID (MarketWatch) — Crude-oil futures fell sharply Wednesday ahead of data expected to show higher U.S. inventories and as more political jitters out of Europe pushed stock futures lower and the dollar higher.
With losses ratcheting up as Wall Street’s open drew closer, futures for delivery in March CLH3 -0.97% dropped $1.49, or 1.6%, to $95.14 a barrel by early New York hours, after rangebound activity during much of Asian trading.
The front-month contract had finished 47 cents higher in a regular session on the New York Mercantile Exchange Tuesday, helped by positive economic data out of the U.S. and Europe.
But a report by the American Petroleum Institute after the regular market close Tuesday showed U.S. crude-oil stockpiles increased 3.6 million barrels in the week ended Feb. 1. The increase, higher than the three-million-barrel rise expected in a survey by Platts, suggests the crude-oil market is well supplied.
A more closely watched weekly inventory report from the Energy Information Administration in the U.S. is expected later Wednesday.
The buck and other markets
Meanwhile, the ICE dollar index DXY +0.26% , which measures the greenback against a basket of six major global currencies, shot up to 79.811 from 79.504, with gains escalating in the hour ahead of the U.S. open.
The dollar especially pushed higher against the euro EURUSD -0.42% and there was some speculation euro weakness was caused by a poll that showed former Italian Prime Minister Silvio Berlusconi has narrowed the lead of front-runner Pier Luigi Bersani. If Berlusconi’s coalition wins the election, then it’s less likely the country will follow through with reforms started by technocratic Prime Minister Mario Monti.
Markets have grown increasingly nervous of this possibility in recent days.
Most of the major Asian stock markets advanced during the session, with Japan’s Nikkei Stock Average JP:100000018 +3.77% leading by a wide margin. Read full story in Asia Markets.
However, Europe stocks fell, tracking losses for U.S. equity futures Wednesday, with Dow Jones Industrial Average DJIA -0.30% futures off 56 points, or 0.4%, to 13,854.
Elsewhere in the energy complex, March futures for gasoline RBH3 -0.56% climbed 0.2% to $3.04 a gallon.
Heating-oil futures for delivery in the same month HOH3 -0.28% added 0.2% to $3.20 a gallon.
The March contract for natural gas NGH13 +0.65% climbed 0.3% to $3.41 per million British thermal units.
