By Christian Berthelsen
Oil futures prices extended their losing streak on Friday,
falling in tandem with equity markets, as a key refinery outage in
the U.S. was expected to weigh on commercial crude-oil demand.
Light, sweet crude for September delivery fell 29 cents, or
0.3%, in price to $97.88 a barrel on the New York Mercantile
Exchange, the lowest closing price since Feb. 6. The global Brent
crude-oil contract fell $1.18, or 1.1%, to settle at $104.84 a
barrel on the ICE Futures Europe exchange.
It was the fifth-consecutive losing session for Nymex crude and
the fourth in a row for Brent.
Friday's losses prolonged a six-week slump for crude-oil prices,
which fell 6.8% on the Nymex and 5.6% on ICE in July.
Analysts and traders said a host of factors were at work in
pressuring down prices, from logistical hiccups in the pipeline and
refinery system that would damp demand, to a lack of global supply
problems despite violence in Iraq, Libya and Eastern Europe. Taken
together, the factors resulted in traders pulling back from bullish
speculative positions that reached record levels in recent
months.
"It is clearly a deflation of the risk premium," said Mark
Vonderheide, managing partner of trading firm Geneva Energy
Markets. "People got caught up in too much (speculative)
length."
On Thursday, U.S. oil futures and equities prices fell steeply,
reflecting fear that improving economic data could prompt the
Federal Reserve to end stimulus programs and raise interest rates
sooner than expected.
Crude prices continued to falling in early trading on Friday,
but got a brief respite as U.S. jobs data came in
weaker-than-expected. They then resumed their decline as the day
wore on.
Another key factor was news of the outage of CVR Refining LP's
115,000-barrel-a-day refinery in Coffeyville, Kan., which the
company on Thursday said could be off line for a month, following a
fire earlier in the week. The refinery draws supply directly from
the Cushing, Okla., delivery hub for the U.S. benchmark contract
crude oil. The resulting loss of demand from the stoppage could
arrest a monthslong trend of declining oil stocks at Cushing that
has been a bullish driver in the market for most of this year.
Friday's price losses weren't limited to crude oil. Gasoline
futures fell sharply, as traders abandoned bullish positions that
had also reached lofty speculative levels, with the front-month
September contract falling 5.32 cents, or 1.9%, to $2.7433 a
gallon. It was the largest one-day drop in gasoline futures since
March 17. September diesel fell 2.38 cents, or 0.8%, to $2.8661 a
gallon.
Write to Christian Berthelsen at
christian.berthelsen@wsj.com
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