Crude-oil futures fell Friday after a reading on the U.S. economy came in below expectations, signaling the potential for another year of sluggish growth that threatens to weigh on fuel demand.
Light, sweet crude for June delivery settled 64 cents, or 0.7%, lower at $93.00 a barrel on the New York Mercantile Exchange. The drop ended six straight sessions of gains.
Brent crude on the ICE futures exchange fell 52 cents to $102.89 a barrel.
After dipping as low as $86.68 a barrel earlier this month, U.S. oil futures have posted a sharp rebound over the past week back into the low $90 range. But analysts and traders say that following the rally, a pullback was likely.
Jim Ritterbusch, head of trading advisory Ritterbusch and Associates, said the rally has "run its course." A weaker-than-expected report on the U.S. economy provided the fuel for a decline.
U.S. gross domestic product rose at a 2.5% annual rate in the first quarter of 2013, the Commerce Department said Friday. A survey of economists by Dow Jones Newswires had forecast a 3.2% annualized expansion.
The U.S. has been a bright spot for global growth in recent months. Analysts and oil traders have been more concerned with China's impact on oil demand recently, but the U.S. remains critical to supporting fuel use, particularly amid the continued economic weakness in Europe.
"The number isn't great, but as far as crude grows, it's fairly neutral," said Carl Larry, head of oil-trading adviser Oil Outlooks and Opinions. He said Friday's decline is likely related to disappointment with the GDP data as well as a pullback from five straight sessions of gains.
"We're seeing crude oil holding at fair value. It's not sexy, but it's about where it should be," he said.
Crude is taking many of its cues from macroeconomic headlines--the decline in early April was due in part to concern about reduced demand amid a deteriorating global growth outlook.
But for U.S. West Texas Intermediate futures, some price moves have reflected increasing shipments of oil from the middle of the U.S. to coastal refineries, which is helping to relieve a bottleneck that depressed U.S. prices compared with Europe's Brent crude since 2011.
The price spread between Brent and WTI settled on Thursday below $10 for the first time since January 2012. On Friday it narrowed to $9.55 early in the session, before widening back out to more than $10 at settlement.
Still, relatively robust North Sea production is weakening Brent, while the ability to move oil out of the U.S. Midwest region continues to increase, boosting WTI.
Dominick Chirichella, an analsyt at the Energy Management Institute, said the price spread between Brent and WTI could narrow to the $8 level if it manages to settle below $10 for a few sessions.
Front-month May reformulated gasoline blendstock, or RBOB, settled 2.31 cents higher at $2.8349 a gallon. May heating oil settled 0.05 cent lower at $2.9012 a gallon.
Copyright (c) 2012 Dow Jones & Company, Inc.
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