Crude oil futures notched a modest increase Thursday after a choppy day of trading that underscored the market's continued anxiety about economic weakness.
In the end, oil futures on the New York Mercantile Exchange for December delivery settled at $86.05 per barrel, up 32 cents or 0.4%. Brent oil futures settled at $108.49, up 64 cents.
However, market participants noted that Thursday's increase followed five straight days of declines that saw oil prices retreat by a total of about seven percent. Oil's inability to muster a stronger rally in the aftermath of such a decline points to continued anxiety about the economy, analysts said.
"What we're looking at is just a slowing economy," said Dominick Chirichella, an analyst at the Energy Management Institute who thinks oil could soon sink to $82. "What we have in the oil business right now is a shortage of demand. It's not a shortage of supply, that's for sure."
"It's just a very nervous market after such a large sell-off this week," said Matt Smith, an analyst at Schneider Electric. There is "a lack of confidence in the market that we are going to see anything positive from the economy."
All eyes will be watching Friday's release of real gross domestic product in the U.S. The median forecast expects real GDP grew an annual rate of 1.8% last quarter, up from 1.3% in the second.
A poor result in GDP could send oil lower again, while a surprisingly good number could propel oil back to its trading range of $88-$93, said Gene McGillian, broker and analyst at Tradition Energy.
Fresh economic data released Thursday were mixed.
The best economic data over the last 24 hours came from the United Kingdom, which posted stronger-than-expected 1% growth for the three months ended September compared with the second quarter--its biggest rise in five years and ending a nine-month stretch of contraction. However, the figures were bolstered by one-off events, including Olympic ticket sales.
U.S. durable good orders also came it at a high level. Orders for long-lasting manufactured goods posted the largest gain in more than two-and-half years in September, as demand for aircraft and defense products rebounded from a slide the prior month. The September gain of 9.9% bested expectations for a 7.8% gain.
At the same time, a report from the National Association of Realtors on pending home sales came in well below expectations. The seasonally adjusted index for pending sales of existing homes increased 0.3% in September from a month earlier to a reading of 99. But economists surveyed by Dow Jones Newswires had predicted pending home sales would increase 2.8% from August's figures.
Market watchers did take some solace from news that the Bank of Japan is considering further easing for the second straight month to spur economic recovery. The U.S. Federal Reserve Wednesday also signaled it planned to continue with quantitative easing.
Front-month reformulated gasoline blendstock, or RBOB, settled at $2.676 a gallon, up 7.3 cents. Front-month heating oil settled at $3.062 a gallon, up 2.3 cents.
Copyright (c) 2012 Dow Jones & Company, Inc.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
More from this Author
Most Popular Articles
From the Career Center
Jobs that may interest you