Crude Ends Near Flat Ahead Of Greek Vote
U.S. crude futures ended nearly flat Friday, as hopes of further central bank stimulus couldn't excite traders ahead of a pivotal election in Greece this weekend.
Light, sweet crude for July delivery settled 12 cents higher at $84.03 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange for August delivery traded 27 cents lower at $97.61 a barrel.
Greece's Sunday elections are being seen as a de facto vote on whether the country will remain in the euro zone. Oil traders are concerned about the economic fallout that could ensue if the country leaves the currency union.
"It's all about Greece right now," said Tariq Zahir, head of Tyche Capital Management, adding that disappointing economic data have made it more likely oil prices will continue their recent slump.
On Friday, a reading of manufacturing activity in New York in June came in far below expectations, falling to the lowest level since November. Additionally, May industrial production fell 0.1%. Economists had expected a modest increase.
The data, while disappointing for traders betting on a continued economic recovery, also offered hope the Federal Reserve and other central banks will take further steps to help the economy.
"Overall, people are going to continue to look at the economic data coming out, and whether or not the Fed will help this recovery to keep moving forward," said Matt Zeman, a market strategist at Kingsview Financial.
The Fed is due to meet next week and will decide whether to offer further stimulus measures. Meanwhile, Mario Draghi, president of the European Central Bank, signaled the bank is prepared to provide market liquidity as the currency bloc braces ahead of the Greek elections.
"The crude market is dealing with the whole 'bad is good' notion that we might see further stimulus," said Matt Smith, an analyst at Summit Energy. "Poor economic data has dragged on crude, but on the upside there is the possibility of further stimulus. And the combination of that is keeping us rather flat today."
Oil prices have marched in tandem with broader markets in recent weeks, falling amid widening fears in Europe about Spain's debt woes and the possibility Greece may abandon the euro.
Any further chaos in Europe is likely to weigh on oil and other raw materials as traders flock to safe-haven assets such as U.S. Treasurys and the dollar.
"Commodity markets today are very much macro-driven," said analysts at Standard Chartered.
The Organization of Petroleum Exporting Countries agreed Thursday to leave its output limit unchanged at 30 million barrels a day. The group is currently pumping around 31.6 million barrels a day, so any move to cut production and adhere to the limit could help support oil prices.
Front-month July reformulated gasoline blendstock, or RBOB, settled 2.53 cents higher at $2.7017 a gallon. July heating oil settled 1.87 cents higher at $2.6465 a gallon.
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