Oil has fallen from the highest level in three weeks, the cut of one week in advance, as ensuring that the European debt crisis will worsen and curb global demand for commodities signs of an economic recovery countered in the U.S. West Texas Intermediate futures fell as much as 0.7 percent, snapping the longest run of gains since December. Greece is not to obtain financial support to carry an austerity plan, Luxembourg Prime Minister Jean-Claude Juncker said yesterday. Chinese exports fell for the first time in over two years, OPEC lowered its demand forecast. U.S. applications for the first time jobless benefits slipped by 15,000 in the week ending February 4, Labor Department data showed yesterday.
“WTI has no direction at this time,” said Ken Hasegawa, a commodity derivatives sales manager at Newedge Group in Tokyo. “When Brent comes under selling pressure, the STI will be demolished to $ 98.50.”
Oil for March delivery fell as much as 71 cents to $ 99.13 per barrel in electronic trading on the New York Mercantile Exchange and was at $ 99.33 at 4:21 p.m. Singapore time. The contract rose a third day yesterday, climbing 1.1 percent to $ 99.84 for the highest close since January 19. Prices are up 1.5 percent this week and 15 percent last year.
Brent crude oil for March settlement slid 72 cents to $ 117.87 per barrel on the ICE Futures Europe exchange. The European benchmark contract of the premium to WTI traded in New York was $ 18.54 compared to $ 18.75 yesterday and a record $ 27.88 on Oct. 14.
Brent Spread Trading
Investors should be ‘extremely careful’ with trading the spread between New York and London contracts, Michael Wittner, head of oil research at Societe Generale SA in New York, said in a report yesterday. Traders who lost money on bets that the gap would narrow their closed positions, increasing the speed and extent of the widening gap, he said. The premium rose 46 percent in January, the biggest gain in 11 months.
Brent prices may fall next week as the dollar advances against the euro, according to Hasegawa. A stronger U.S. currency usually reduces the investment appeal of dollar-denominated commodities like oil.
“Brent rose for eight consecutive days of yesterday, supported by foundations, but was also impacted by currency movements such as the euro to strengthen,” said Hasegawa. “After sharp gains, the euro has corrected some, like oil.”
Greece, China
The euro retreated from a two-month high against the dollar before a Greek parliamentary vote on austerity measures this weekend that the nation’s Finance Minister Evangelos Venizelos said amounted to a referendum on euro membership. European finance ministers refused to deliver a rescue plan for Greece to the measures to be passed to the law.
China’s exports fell 0.5 percent in January, the trade was disrupted by the Lunar New Year Holiday. Imports dropped 15.3 percent. China accounted for 11 percent of the oil in the world demand, while the EU countries consumed 16 percent, according to BP Plc’s Statistical Review of World Energy.
The land of the crude imports last month rose 7.4 percent compared with a year ago to 23.41 million tons, or about 5.54 million barrels per day, according to preliminary data on the website of the Beijing-based General Administration of Customs.
The Organization of Petroleum Exporting Countries cut its estimate of crude oil consumption this year by 120,000 barrels per day to 88.76 million per day, the group based in Vienna secretariat said in its monthly market report yesterday. Delivery of the 12 members rose to 30.9 million barrels per day last month, the most since October 2008, compared with an estimated demand of 29.55 million, the report shows.
U.S. economy
U.S. first-time unemployed claims decreased to 358,000, in comparison with the estimates varied from 355,000 to 385,000 in a survey of 48 economists Bloomberg News. The four-week moving average, a less volatile measure, fell to 366,250, the lowest since April 26, 2008.
“The songs are currently a much better scenario in the U.S. support,” said Michael McCarthy, chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “We had jobless claims as a result of better jobs and therefore a better outlook for oil.”
Oil in New York may rise next week after U.S. refiners increased the rates, strengthening demand for crude oil, a Bloomberg News survey showed. Nineteen of 36 analysts, or 53 percent, forecast prices will climb to 17 February. Eight respondents, or 22 percent, predicted futures will decline and nine estimated there will be little change. It was the most bullish response since april.
source:reuters
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