Oil Prices Straddle $91 After China Data
Crude-oil futures were straddling the $91-a-barrel mark in European trading on Thursday, expanding on a prior bruising session, as the commodity saw pressure from high U.S. inventories, the prospect of more oil supplies from Saudi Arabia and weak Chinese manufacturing data.
In volatile trading, crude futures for light-sweet-crude-oil futures CLV2 dropped sharply at the Europe open, then pared some of those losses. Futures fell 85 cents, or nearly 1%, to $91.13.
The drop came on top of a 3.5% tumble in the contract in a regular New York Mercantile Exchange session on Wednesday. The contract finished at a 6-week low.
At current prices, front-month crude-oil futures have slumped nearly 8% just this week.
Preliminary data from HSBC on Chinese manufacturing conditions in September Thursday showed a drop in activity for the 11th straight month.
The HSBC “flash” purchasing managers’ Index for the world’s second-largest economy printed at 47.8, below the 50-point threshold that separates expansion and contraction, but up slightly from a final reading of 47.6 in August. Read full story on China PMI.
Tim Evans, an energy analyst at Citi Futures, said Wednesday’s steep fall in oil, which defied a rise on Wall Street, came as “money managers cut long positions in tacit recognition that the oil market has its own fundamentals, including ample current supplies.”
Inventories, Saudi offer of supply
The sharp declines in crude-oil prices came as official data released by the Energy Information Administration showed U.S. inventories jumped 8.5 million barrels in the week ended Sept. 14, trouncing expectations for a 2.5 million-barrel increase.
A Financial Times report saying Saudi Arabia, the world’s largest petroleum exporter, has offered customers in the U.S., Europe and Asia extra oil supplies to offset rising oil prices also weighed down on the commodity. Read Market Extra on what’s behind oil’s steep fall this week.
Among other contracts, gasoline for October delivery RBV2 rose 1 cent to $2.83 per gallon. Heating oil for delivery in the same month HOV2 was flat at $3.04 a gallon.
Natural gas for October delivery NGV12 was flat at $2.76 per million British thermal units.
Marketwatch
