By Carla Mozee, MarketWatch
LOS ANGELES (MarketWatch) — Oil prices largely held steady in electronic trade Thursday, following a slump on news of a surge in U.S. crude supplies.
Crude oil for June delivery CLM3 +0.02% edged up four cents to $91.07 a barrel during Asian trading hours.
Oil on Wednesday fell $2.43, or 2.6%, on the New York Mercantile Exchange, though they pared losses late Wednesday after the U.S. Federal Reserve made no changes to its bond-buying program, but said it was prepared to “increase or reduce the pace of its purchases.” Economic stimulus can be supportive for energy demand.
A nearly 1% drop in the S&P 500 Index SPX -0.93% suggested “investors were not impressed by the [Federal Open Market Committee’s] statement. We’ll see what they make of [the] European Central Bank meeting and Friday’s U.S. employment report for April as the next macroeconomic “known unknowns,” Citi energy futures specialist Tim Evans wrote to clients.
Investors later Thursday will look for further monetary stimulus from the European Central Bank, with analysts widely expecting a cut in the benchmark interest rate after a slate of weaker-than-expected economic data. The key rate is expected to be cut to 0.5% from 0.75%, where it’s been since July 2012.
Ahead of the decision, the June contract for rival benchmark Brent crude UK:LCOM3 +0.33% slipped 5 cents, or 0.1%, to $99.90 a barrel.
Investors may also consider data released Thursday by HSBC confirming a sharp slowing of growth at Chinese factories in April. The final reading of the manufacturing Purchasing Managers’ Index for China was downwardly revised to 50.4 from a preliminary reading of 50.5, putting it well below March’s reading of 51.6.
Oil prices sagged Wednesday as a slowdown in U.S. private-sector jobs growth in April and a fall in the official Chinese gauge of manufacturing activity fed concerns about energy demand, while a U.S. government report confirmed that crude inventories last week rose much more than had been anticipated.
The U.S. Energy Information Administration said crude supplies jumped 6.7 million barrels for the week ended April 26. Analysts polled by Platts had expected a climb of 1.4 million barrels. Late Tuesday, the American Petroleum Institute said U.S. crude supplies surged 5.2 million barrels last week.
Elsewhere in the energy market Thursday, June natural gas NGM13 +0.42% rose less than 1 cent, or 0.1%, to $4.33 per million British thermal units. The EIA’s weekly update on supplies is due later Thursday. Analysts polled by Platts forecast a climb of between 28 billion cubic feet and 32 billion for the week ended April 26
June gasoline RBM3 -0.03% rose less than 1 cent, or 0.1%, to $2.72 a gallon while June heating oil HOM3 +0.46% slipped 1 cent, or 0.1%, to trade at $2.78 a gallon.
