Nymex Crude Makes Last-Minute Dip Into Negative Territory
Crude-oil futures slid late in the session to finish with a slight loss--off 0.6%--Tuesday as traders positioned themselves for the upcoming U.S. oil inventory report.
Light, sweet crude for November delivery settled 59 cents lower at $91.89 a barrel on the New York Mercantile Exchange after spending most of the day in positive territory. The European oil benchmark, Brent crude, settled 62 cents, or 0.6%, lower at $111.57 a barrel for November delivery on the IntercontinentalExchange.
Trading was slow throughout the day as the market awaited U.S. oil inventory data to be released Wednesday. The U.S. Energy Information Administration will unveil its report on stockpiles of crude and petroleum products at 10:30 a.m. EDT. The data are expected to show that crude-oil supplies rose 1.5 million barrels last week, according to a Dow Jones Newswires survey of experts.
An expected increase in oil stocks caused some traders to sell barrels to take profits now. That, along with a drop in equities, helped the last-minute drop in prices, said Gene McGillian, broker and analyst at Tradition Energy.
"The market didn't seem to attract any fresh buyers," Mr. McGillian said. He added that until the market gets a clearer picture from the inventories and the lackluster U.S. employment situation, "we may be in for some choppy trading."
Robust employment is a strong indicator of oil demand, indicating manufacturing demand for energy and consumer demand for gasoline to drive to work.
But fears that gasoline demand will remain low amid an unsteady U.S. economy continue to be a drag on oil prices, said Jefferies oil analyst Andy Lebow. Front-month November reformulated gasoline blendstock, or RBOB, settled 5.09 cents lower, or 1.7%, at $2.8692 a gallon. "Today we saw some serious profit-taking on gasoline, and that took some toll on crude," Mr. Lebow said. "I still think the gasoline story is not over yet."
The Dow Jones survey sees gasoline inventories falling by 700,000 barrels, while stocks of distillates, a category that includes heating oil and diesel fuel, are expected to fall by 300,000 barrels.
After pushing to highs near $100 a barrel in mid-September, U.S. crude futures have slumped back to the $90 level as traders question whether a sluggish economy will improve demand for oil and petroleum products. Despite a recent surge in gasoline futures, crude-oil prices have stayed in a relatively narrow range of $90 to $94 a barrel.
November heating oil settled 1.03 cents lower at $3.1225 a gallon.
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