Oil Rebounds After Slumping to One-Month Low on Higher U.S. Jobless Claims
Oil rebounded from a one-month low in
New York as the dollar declined against the euro and some investors took the view a drop below $76 a barrel made the commodity attractive to buy.
Crude rose for the first time in four days as the euro climbed before a European report forecast to show growth in the 16-nation region accelerated. Oil, which has declined 5.7 percent this week, fell the most in six weeks yesterday as initial jobless claims in the U.S. rose and European industrial production unexpectedly declined in June.
“The global economy is patchy,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “In Europe, a lot of the macro data has been a bit better than expected, but the data out of the U.S. has been terrible. Oil is bordering on the lower part of the range that it’s been trading and if you were looking for an area to buy in, this would be it.”
Crude oil for September delivery gained as much as 41 cents, or 0.5 percent, to $76.15 a barrel, and was at $76.17 in electronic trading on the New York Mercantile Exchange at 9:34 a.m. Singapore time. Yesterday, the contract fell $2.28 to $75.74, the lowest settlement since July 12. Futures are up 8 percent from a year ago.
“Oil has bounced around here and the low $80s and I’d expect it to do a bit more of that before it breaks higher once global growth starts to reassert itself,” Westmore said.
European Economy
The euro-region economy probably expanded 0.7 percent in the second quarter from the previous three months, when it grew 0.2 percent, according to a Bloomberg survey of economists. That would be the fastest growth since the first quarter of 2008.
The EU statistics office will release its report on euro- area gross domestic product, along with data on May exports to the U.S., China and the U.K., at 11 a.m. today in Luxembourg.
The euro rose against the dollar for the first time in five days and was trading at $1.2835 at 10:53 a.m. Sydney time. A weaker U.S. currency increases the appeal of commodities as an alternative investment.
Brent crude oil for September settlement climbed as much as 29 cents, or 0.4 percent, to $75.81 a barrel, and was at $75.70 on the London-based ICE Futures Europe Exchange at 9:16 a.m. Singapore time. Yesterday, the contract fell $2.12, or 2.7 percent, to end the session at $75.52 a barrel on the London- based ICE Futures Europe Exchange yesterday. It was the lowest close since July 21.
Jobless Claims
Oil declined yesterday as U.S. initial jobless claims rose by 2,000 to 484,000 last week, the highest level since February. A government report this week showed that U.S.gasoline supplies climbed for a seventh week and stockpiles of distillate fuel, a category that includes heating oil and diesel, advanced to the highest level since January 1983.
“Negative data weighed on the market last night, and whilst we’ve got that, crude will remain under pressure,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “We have this build in supplies for hurricane season and drive time but we’re not seeing that consumption occur.”
Economists forecast jobless claims would decline to 465,000, according to the median of 42 projections in a Bloomberg News survey. The government revised the prior week’s figure to 482,000 from a previously reported 479,000.
OPEC Supplies
U.S. gasoline consumption peaks during the summer, when Americans take vacations. The driving season lasts from the Memorial Day weekend in late May to the Labor Day holiday in early September. Refineries often shut units for maintenance in September and October as gasoline demand falls and before heating-oil use increases.
THe Organization of Petroleum Exporting Countries will reduce shipments this month as refineries close for maintenance, according to tanker-tracker Oil Movements. OPEC will ship 23.25 million barrels a day in the four weeks to Aug. 28, down 1.8 percent from the month ended July 31, the Halifax, England-based consultant said yesterday. The data exclude Ecuador and Angola.
