Crude Little Changed After Modest Drop On GDP Data
Crude oil futures prices were little changed early Friday after modest declines on U.S. first-quarter gross domestic product growth came in less than expected, at 2.2%.
Economists surveyed by Dow Jones Newswires had expected the Commerce Department to report a 2.6% rise.
Oil prices moved modestly lower in the wake of the numbers, but failed to gain any solid downward momentum. Traders said position adjustment ahead of the expiration Monday of May-delivery reformulated gasoline blendstock and heating oil futures was spurring a bit of carryover buying in crude. Dollar weakness after the GDP data also invited buyers.
Traders said June light, sweet crude oil futures on the New York Mercantile Exchange are still having difficulty breaking out of the $101-$105 boundaries in which it traded this month.
Worries about a flare-up of the European debt crisis are keeping pressure on prices, with the focus on Spain, where unemployment was reported to have hit an 18-year high.
Reacting to Spain's deteriorating economic and financial outlook, international credit ratings agency Standard and Poor's Corp. late Thursday downgraded Spanish government debt to BBB-plus from A. S&P cited a worse-than-expected deterioration of Spain's budget trajectory since last year, and a growing likelihood that the government will need to provide aid for the banking sector, which has been hit by mounting real estate losses.
Nymex June crude futures were trading 5 cents lower, at $104.50 a barrel, moving in a tight $103.74 to $104.69 a barrel range.
ICE June Brent was 16 cents lower, at $119.76 a barrel.
"The GDP number was a little less than expected, and the market dipped a little, but we're hanging on," said Tom Bentz, director at BNP Paribas Prime Brokerage. He noted Nymex futures has in recent days held above $101 a barrel, but failed to break out above $105, a level that could clear a path to a rebound to $108 a barrel.
Concerns about European and U.S. oil demand are keeping prices in check, he said. "The market's watching Spain very closely. It's going to be a rocky road and can affect the demand side of the picture," he said.
Reformulated gasoline blendstock futures for May delivery were down 0.18 cent, at $3.1815 a gallon, while May heating oil futures were down 0.75 cent, at $3.1869 a gallon, both above session lows.
Copyright (c) 2012 Dow Jones & Company, Inc.
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