Crude oil declined in New York, trimming the biggest weekly increase in four, amid speculation fuel demand will falter as Asia’s central banks raise interest rates to curb inflation and the U.S. job market weakens.
Futures slipped as much as 0.6 percent, after earlier climbing 0.2 percent. South Korea’s central bank raised rates for a third time this year and U.S. jobless claims unexpectedly increased. Prices climbed yesterday after the U.S. Commerce Department said the nation’s trade gap shrank 6.7 percent to $43.7 billion, the lowest since December.
“The bulls and bears are firmly entrenched in a tug-of- war,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted crude will average $100 a barrel this year. “The market will be quite happy to take it higher if they see good economic grounds but we don’t have a lot of data to suggest that’s the case.”
Crude for July delivery slid as much as 62 cents to $101.31 a barrel in electronic trading on theNew York Mercantile Exchange and was at $101.43 at 8:54 a.m. London time. Prices are up 1.2 percent this week and 34 percent the past year.
Brent crude for July delivery was at $119.27 a barrel, down 30 cents, on the London-based ICE Futures Europe exchange. The contract yesterday increased $1.72, or 1.5 percent, to $119.57. It was the highest settlement since May 4.
The European benchmark contract traded at a premium of $17.91 a barrel to U.S. futures today on the ICE exchange.
Korean Interest RatesThe Bank of Korea raised its benchmark seven-day repurchase rate to 3.25 percent from 3 percent to rein in inflation that has exceeded its target range and curb record household debt. Eight of 17 economists surveyed by Bloomberg News predicted the decision with the rest expecting no change.
U.S. jobless claims rose by 1,000 to 427,000 last week, Labor Department figures showed yesterday. Economists surveyed by Bloomberg News projected a drop in claims to 419,000. The number of people on unemployment benefit rolls and those receiving extended payments decreased.
U.S. oil imports declined by $2.42 billion in April, contributing to the narrower trade deficit, the Commerce Department said. The nation imported 8.41 million barrels a day on average, the fewest since October.
The Organization of Petroleum Exporting Countries on June 8 was unable to reach an accord on targets for the first time in at least 20 years after six countries opposed a Saudi Arabian push to increase supply.
OPEC Weakened“The economic news out of the U.S. is a bigger driver of near-term oil direction than OPEC changing their output targets,” said Victor Shum, senior principal at consultants Purvin & Gertz Inc. Singapore. “The market has seemed to realize that supply issues among OPEC may not really matter that much in the near term. At the end of the day what matters is actual supply and the Saudis said that they would unilaterally put more barrels on to the market.”
OPEC’s quota system has been weakened by the need to replace lost oil from Libya, the group’s secretary general said after this week’s divided meeting. “I don’t want to say it is dead,” Abdalla el-Badri said yesterday in Vienna, referring to the group’s overall production target. “It is there, but we have to see how to replace Libya.”
A rebellion against Libyan leader Muammar Qaddafi has cut production in the North African country by almost 90 percent, according to Bloomberg estimates. Output slumped to 200,000 barrels a day last month, from an average of 1.55 million last year, according to data compiled by Bloomberg.
Saudi Arabia, OPEC’s biggest producer, Kuwait, Qatar and the United Arab Emirates were ready to supply more oil to the market, Saudi Oil Minister Ali al-Naimi said after the meeting. The four nations proposed a 1.5 million-barrel-a-day increase.
Libya, Angola, Ecuador, Algeria, Iran and Venezuela were opposed to higher limits, according to al-Naimi. Iraq is exempt from the targets.
Futures slipped as much as 0.6 percent, after earlier climbing 0.2 percent. South Korea’s central bank raised rates for a third time this year and U.S. jobless claims unexpectedly increased. Prices climbed yesterday after the U.S. Commerce Department said the nation’s trade gap shrank 6.7 percent to $43.7 billion, the lowest since December.
“The bulls and bears are firmly entrenched in a tug-of- war,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted crude will average $100 a barrel this year. “The market will be quite happy to take it higher if they see good economic grounds but we don’t have a lot of data to suggest that’s the case.”
Crude for July delivery slid as much as 62 cents to $101.31 a barrel in electronic trading on theNew York Mercantile Exchange and was at $101.43 at 8:54 a.m. London time. Prices are up 1.2 percent this week and 34 percent the past year.
Brent crude for July delivery was at $119.27 a barrel, down 30 cents, on the London-based ICE Futures Europe exchange. The contract yesterday increased $1.72, or 1.5 percent, to $119.57. It was the highest settlement since May 4.
Korean Interest RatesThe Bank of Korea raised its benchmark seven-day repurchase rate to 3.25 percent from 3 percent to rein in inflation that has exceeded its target range and curb record household debt. Eight of 17 economists surveyed by Bloomberg News predicted the decision with the rest expecting no change.
U.S. jobless claims rose by 1,000 to 427,000 last week, Labor Department figures showed yesterday. Economists surveyed by Bloomberg News projected a drop in claims to 419,000. The number of people on unemployment benefit rolls and those receiving extended payments decreased.
U.S. oil imports declined by $2.42 billion in April, contributing to the narrower trade deficit, the Commerce Department said. The nation imported 8.41 million barrels a day on average, the fewest since October.
The Organization of Petroleum Exporting Countries on June 8 was unable to reach an accord on targets for the first time in at least 20 years after six countries opposed a Saudi Arabian push to increase supply.
OPEC Weakened“The economic news out of the U.S. is a bigger driver of near-term oil direction than OPEC changing their output targets,” said Victor Shum, senior principal at consultants Purvin & Gertz Inc. Singapore. “The market has seemed to realize that supply issues among OPEC may not really matter that much in the near term. At the end of the day what matters is actual supply and the Saudis said that they would unilaterally put more barrels on to the market.”
OPEC’s quota system has been weakened by the need to replace lost oil from Libya, the group’s secretary general said after this week’s divided meeting. “I don’t want to say it is dead,” Abdalla el-Badri said yesterday in Vienna, referring to the group’s overall production target. “It is there, but we have to see how to replace Libya.”
A rebellion against Libyan leader Muammar Qaddafi has cut production in the North African country by almost 90 percent, according to Bloomberg estimates. Output slumped to 200,000 barrels a day last month, from an average of 1.55 million last year, according to data compiled by Bloomberg.
Saudi Arabia, OPEC’s biggest producer, Kuwait, Qatar and the United Arab Emirates were ready to supply more oil to the market, Saudi Oil Minister Ali al-Naimi said after the meeting. The four nations proposed a 1.5 million-barrel-a-day increase.
Libya, Angola, Ecuador, Algeria, Iran and Venezuela were opposed to higher limits, according to al-Naimi. Iraq is exempt from the targets.
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