Futures Movers: WTI oil struggles for direction after 4-session loss
Oil futures traded mixed Tuesday, with West Texas Intermediate crude seesawing between slight losses and gains and Brent crude aiming for its fifth straight session of losses as a plunge in Chinese equities dulled prospects for energy demand.
A weekly rise in the U.S. oil-rig count and expectations that Iran will soon contribute more oil to the global market kept pressure on prices, but expectations for a fall in weekly U.S. crude inventories provided some support.
September crude CLU5, +0.76% traded at $ 47.57 a barrel on the New York Mercantile Exchange, up 18 cents, or 0.4%. Prices, which tapped lows under $ 47 earlier, remained near their lowest levels since March.
Brent crude LCOU5, -0.54% was down 65 cents, or 1.2%, to $ 52.82 a barrel on London’s ICE Futures exchange.
WTI oil saw a technical bounce, trading as high as $ 47.66, but “its primary downtrend has reasserted itself,” said Colin Cieszynski, chief market strategist at CMC Markets.
“We could see trading bounces here or there,” but there are no major news due out except for the upcoming weekly petroleum inventory reports, he said.
The American Petroleum Institute will report its supply data late Tuesday, while the U.S. Energy Information Administration will release its figures early Wednesday. Analysts polled by Platts forecast a weekly decline of 700,000 barrels for crude supplies.
Taking a look at the bigger picture, Daneil Ang, investment analyst with Phillip Futures, said that the big drop in Chinese stocks has “weakened the sentiment.”
The concerns also come in the wake of a rise in weekly numbers for U.S oil drilling rigs, which could add to a supply overhang.
The bearish sentiment in oil has also increased over the past few days as Iran’s output is expected to add to a stream of oil supplies, for which there are fewer takers.
For some producers, lower oil prices means an intensifying market share war, an ANZ report said. It added that Iraq’s oil exports from the south climbed to a record 3 million barrel per day, a 10% increase month-on-month. At the same time the self-ruled Kurds in the north are also shipping crude independently, adding to the global supply.
Back on Nymex, August gasoline RBQ5, -1.04% fell 2.5 cents, or 1.3%, to $ 1.795 a gallon and August heating oil HOQ5, +0.42% shed less than a half cent to $ 1.592 a gallon.
August natural gas NGQ15, +1.83% traded at $ 2.84 per million British thermal units, up 5 cents, or 1.8%. The August contract expires at Wednesday’s close.