Oil futures fall on global demand worries
Claudia Assis and Barbara Kollmeyer, MarketWatch
SAN FRANCISCO -- Crude-oil futures retreated Friday after the International Energy Agency warned sluggish global growth could restrict demand and after China reported weaker-than-expected trade data.
Oil for September delivery lost 48 cents, or 0.5%, to $92.86 a barrel on the New York Mercantile Exchange.
Investors are watching U.S. equities closely and gauging their reaction to the Chinese trade data, said Tim Evans, an analyst with Citigroup's Citi Futures Perspective.
They are trying to determine whether it is bearish news that can be turned into good news if it promotes the idea of imminent quantitative easing or if it's just bearish news, Evans said.
Crude rose a penny to end Thursday at $93.36 a barrel, following news that Tropical Storm Ernesto had shuttered some of Mexico's oil installations.
Sentiment was dampened Friday after the International Energy Agency said a "sluggish economic growth" picture could keep annual oil demand growth pinned down to 900,000 barrels a day in 2012 and 800,000 in 2013. The IEA said global oil supply rose by 300,000 bbl a day in July, on a monthly basis, to 90.7 million bbl.
Oil markets have been bullish lately and rejecting news that dampen that enthusiasm, Evans said. Such a downward revision from the IEA "would warrant more than a 50-cent drop," he added.
On Thursday, the Organization of Petroleum Exporting Countries warned of a "horizon full of turbulence" that could lead to a sharp fall in demand growth for 2013. Its monthly oil market report showed the cartel's output falling to its lowest level since February.
China reported that its trade surplus flattened out in July, while imports rose 4.7%, both falling short of expectations. The news took a dent out of global equities and other commodities as it increased worries about the outlook for the No. 2 global economy.
That followed data earlier in the week that showed retail sales and deflation for producer prices, helping drive gains for markets, as it reinforced the view that officials in Beijing will be pushed to ease monetary policy further.
European and Asian stocks fell Friday and Wall Street followed suit, while the dollar rose as traders grew risk-averse, although the U.S. currency strengthened as the session progressed.
In other trading, natural-gas futures , which had rallied more than 5% at one point in Thursday's New York session, fell 13 cents, or 4.5%, to $2.81 per million British thermal units.
Natural-gas futures rallied briefly after the latest U.S. inventories report, though the contract finished modestly higher in the prior session.
September gasoline turned higher, up less than 1 cent, or 0.2%, to $3 a gallon. September heating oil fell 2 cents, or 0.8%, to $3.02 a gallon.