Crude prices fluctuate as markets digest U.S. data; Concerns over supply weigh
On Monday crude-oil futures struggled for direction as market players estimated the impact of a mildly positive U.S. April employment report and as there still were fears over excessive supply.
Nymex West Texas intermediate crude was 9 cents lower from the previous close at $59.30 a barrel, while Brent crude was up 14 cents at $65.49 a barrel.
U.S. data Friday sparked hopes of more oil consumption, but traders are also worried that a rally in oil prices over the past one-and-a-half months may prompt more production. Some analysts say producers may dial up their production if prices hold above more than $60 a barrel.
“We’re seeing a slight increase in the dollar index and this leads to downward pressure on crude oil prices” said Daniel Ang, oil investment analyst at brokerages Phillip Futures Pte Ltd..
On Monday the market was also evaluating an interest-rate cut by the People’s Bank of China over the weekend, a move that tends to support prices on expectations that the government is increasing support of Chinese economic growth.
The reverse side to the regulator’s move, as Ang considers, is that it may have come in anticipation of weak Chinese industrial production and retail sales data to be released this Wednesday.
“This is the kind of fear the market has right now,” so “over the week, we may see a very weak market,” he added.
On Friday Brent prices finished the week flat, even after Chinese data had indicated crude oil imports rising to a record high of 30.3 million tonnes in April, up 8.7% year-over-year. Prices in the U.S., however, jumped 1.3% on the rebound in U.S. payrolls.
