NYMEX Sep. Crude Futures DN on Rising Supply, Soft Economy
NEW YORK (DTN) -- New York Mercantile Exchange crude futures fell for the
second straight session after economic and inventory data fueled concerns about
the U.S. economy and oil demand, which pressured commodity and equity markets.
September crude contract initially plunged to a low $75.90 during morning
trade, breaking several resistance levels in the process, after fresh data from
the Energy Information Administration showed U.S. crude inventories rising by a
more-than-expected 7.3 million bbl last week and after the Federal Reserve said
economic activity was lackluster in many parts of the country.
However, rumors of a refinery outage, technical support and a weaker U.S.
dollar prompted short-covering in the early afternoon trade and helped prices
to pare earlier losses. The rumored outage of a crude unit at a Midwest
refinery mostly impacted gasoline prices, which closed a tad higher.
"Prices were at the end of the downtrend for this week," said analyst Mike
Fitzpatrick at MF Global in New York, explaining the late short-covering.
At settlement following the 2:30 PM ET closing bell, September NYMEX WTI
crude futures were down 51cts at $76.99 bbl, moving above an earlier low at
$75.90 bbl and down from Tuesday's 2-1/2-month spot high at $79.69.
In products trade, August NYMEX No. 2 heating oil futures were down 0.30cts
at $1.9964 gal and August NYMEX RBOB gasoline futures edged up 0.02cts to
$2.0634.
The EIA crude data was more bearish than the American Petroleum Institute's
data, released Tuesday afternoon, that showed a 3.1 million bbl build in the
nation's crude supply. Both sets of data missed analysts' estimates for a
drawdown of 1.7 million bbl for the week-ended July 23.
Supplies of distillates and gasoline were smaller than analysts estimated,
while implied demand for each of the products were higher on a weekly basis.
On Wall Street, major stock indices also fell after the Commerce Department
said demand for durable goods dropped 1 percent in June and the Federal
Reserve's latest Beige Book said overall U.S. economic activity has generally
slowed.
George Orwel, 1.718.522.3969, george.orwel@telventdtn.com, Telvent DTN,
www.telventdtn.com. (c) 2010 Telvent DTN. All rights reserved
