Crude Oil Down Slightly Ahead of Busy Week of News
Crude oil futures took a breather Monday and were marginally lower as investors looked ahead to a busy week of economic news.
Nymex front-month oil futures settled at $89.78 a barrel Monday, down 35 cents, or 0.4%. Brent oil futures settled at $106.20, down 27 cents.
Analysts said the markets were likely to trade in a choppy fashion this week until this week's major economic events play out. In a three-round whammy of big-ticket economic news, markets are eyeing the conclusion of a Federal Open Markets Committee meeting Wednesday, a European Central Bank meeting Thursday and new U.S. jobs figures on Friday.
The markets will also receive the weekly petroleum inventory report on Wednesday. Crude-oil inventories fell 1.1 million barrels in the week ended July 27, according to an average of estimates from five analysts. Last week's inventory report surprised the markets following a large build.
These events come as global confidence in the economic outlook remains weak. Investors will be looking for news on whether the ECB will trim interest rates and if the U.S. Federal Reserve will undertake another round of quantitative easing. The median forecast of economists surveyed by Dow Jones Newswires calls for a gain of only 90,000 new jobs added in July, compared with 80,000 added in June.
"We're probably going to trade kind of choppy this week until the ECB," said Tariq Zahir, a managing member at Tyche Capital Advisors. "There's a lot of reason to stay on the sidelines and see what happens."
"We are in a wait-and-see mode," said Gene McGillian, broker and analyst at global brokerage Tradition Energy.
New U.S. data Monday showed the first year-on-year monthly increase in U.S. oil demand since early 2011.
U.S. oil demand in May rose 1.9%, or 344,000 barrels a day, from a year earlier to 18.707 million barrels a day, revised government data released Monday show.
The gain, led by a 2.4% jump in gasoline demand amid sliding prices, was the first year-on-year rise in the world's biggest oil consumer since March 2011 and the biggest since January 2011, data from the Energy Information Administration show.
But analysts said the greater consumption likely wouldn't continue in the months ahead.
Front-month reformulated gasoline blendstock, or RBOB, settled at $2.932 a gallon, up 4.4 cents. Front-month heating oil settled at $2.877 a gallon, down 1.2 cents.
Copyright (c) 2013 Dow Jones & Company, Inc.
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