OIL FUTURES: Brent Crude Falls To Lowest Since February
May 03 2012 - 4:02PM
Dow Jones News
U.S. oil futures tumbled to their lowest level in two weeks
Thursday, while the main European benchmark slid to its weakest
finish since February, weighed down by a slew of disappointing
economic data.
Light, sweet crude for June delivery settled $2.68, or 2.6%,
lower at $102.54 a barrel on the New York Mercantile Exchange.
That's the benchmark's weakest finish since April 19.
Brent crude on the ICE futures exchange settled $2.12, or 1.8%,
lower at $116.08 a barrel, its lowest finish since Feb. 6.
Traders and analysts said they are bracing for what is likely to
be a weak reading Friday of U.S. nonfarm payrolls data.
Expectations are low after payrolls giant Automatic Data Processing
Inc. on Wednesday said fewer than expected jobs were added to the
U.S. economy in April.
"It's a combination of less-than-encouraging macroeconomic
headlines, and I think you're getting some money taken off the
table ahead of tomorrow's jobs report," said Stephen Schork, editor
of the Schork Report, an energy newsletter.
Futures were also weighed by indications that the European
Central Bank isn't planning additional stimulus measures to prop up
Europe's flagging economy. ECB President Mario Draghi said it is up
to governments to foster growth, and resisted pressure to take
additional steps such as interest-rate cuts and more bank
lending.
"It was the statements out of Draghi, which was more doom and
gloom. The sentiment is just not very good," said Rich Ilczyszyn,
chief market strategist at brokerage iiTrader.
The comments come as Europe's economic recovery is looking
increasingly tenuous. Earlier this week, Spain disclosed it is
officially in a recession. This weekend, French voters are expected
to elect a socialist president who is likely to challenge the
European Union's recent austerity push.
In the U.S., the economic outlook isn't looking much better. On
Wednesday, ADP said only 119,000 private-sector jobs were created
in April, far below the 175,000 jobs expected.
Oil-market participants keep a close eye on employment data for
signs on oil and fuel demand. High unemployment in the U.S., the
world's biggest oil consumer, has been a major factor behind the
slump in demand for gasoline because it means fewer motorists
traveling to work or taking vacations.
The weak U.S. economy is likely to keep oil demand weak for the
near future, said Dominick Chirichella, analyst at the Energy
Management Institute. "All signs continue to point to the U.S.
economy moving into another slow patch," he said. "I expect oil
consumption to remain in a contraction trend that has been in place
since 2007."
Front-month June reformulated gasoline blendstock, or RBOB,
settled 2.57 cents, or 0.8%, lower at $3.05 a gallon. June heating
oil settled 5.56 cents, or 1.8%, lower at $3.0869 a gallon.
More information on settlements and highs and lows for futures
on Nymex and ICE platforms can be found by searching for the
following headlines:
Nymex Light Crude Oil Close
Nymex Harbor RBOB Gasoline Close
Nymex Heating Oil Close
ICE Brent Crude Oil Close
ICE Gas Oil Close
-By Dan Strumpf, Dow Jones Newswires; 212-416-2818;
dan.strumpf@dowjones.com