Oil prices hesitated Thursday as oil traders reacted to a barrage of mixed economic data and the tropical storm reports. The October Revolution Brent crude contract fell 37 cents to $ 114.48 per barrel and West Texas Intermediate (WTI) light sweet crude for October delivery up 12 cents sides to settle at $ 89.93. Both were bouncing back and forth between negative and positive territory.
The volatile action came amidst a barrage of mixed economic and tropical storm news that investor sentiment does not swing one way or another.
On Thursday, the Institute for Supply Management’s index of production for the month dipped to 50.6 in August from 50.9 in July. Given that a reading above 50 indicates the manufacturing economy is generally expanding, the data that oil traders with some relief.
Construction spending, however, fell 1.3% in July compared with an increase of 1.6% in June.
Also on Thursday, the Labor Department offered a tepid jobless claims report, said she dropped to 12 000 409 000 for the week ended Aug. 27 from a revised 421,000 the previous week. Economists had expected claims to come in at 410,000.
The U.S. reports came on the back of very poor production lectures in Europe.
The Markit Eurozone Manufacturing PMI Economics plummeted to a reading of 49 in August from 50.4 in July. The final reading was below the estimate of 49.7 and was the lowest in two years – exacerbated concerns about the state of the Eurozone economy, such as regional leaders not to come to a consensus plan to its debt crisis.
On a positive note, the world’s largest consumer of energy, China, reported that manufacturing activity in the country rose to 50.9 last month from a 29-month low of 50.7 in July.
Oil traders will now expect too much of a monthly employment report Friday and keep their eye on the rising tropical activity that a 70% chance of a tropical cyclone in the coming days and threaten oil and gas production along the Gulf disrupt of Mexico.
BP (BP_), Anadarko Petroleum (APC_) and Apache (APA_) are among the operators in the Gulf of Mexico temporarily closing major drilling projects and evacuating personnel.
On Friday, economists are expecting about 100,000 jobs added in August after gains of 117,000 in July. Briefing.com expects the unemployment rate to tick up 9.2% from 9.1% in July.
Looking further ahead, the International Monetary Fund expects slower growth for the U.S. economy, according to leaked reports of a World Economic Outlook of the fund. The report says that the IMF plans to 2012 U.S. gross domestic product growth forecast by 0.7 percentage point cut to 2% within a month.
source:thestreet
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