London: US crude oil futures fell below $76 per barrel on Monday, consolidating after a week of gains and ahead of US quarterly earnings and key macro-economic data.
S&P 500 earnings are expected to have risen more than 25% in the second quarter but the outlook for consumer demand is less bright. US retail sales figures on Wednesday are expected to show spending easing in June.
The dollar rose against a basket of currencies as gold slipped. A firmer dollar often depresses commodities as it makes them more expensive for holders of other currencies.
Crude for August delivery fell 54 cents to $75.55 a barrel by 2:53pm, after closing last week with a gain of more than 5 percent -- its biggest jump since the week to 28 May.
London Brent crude was trading 54 cents lower at $74.88 a barrel.
“Last week was very strong and the dollar is a little stronger,” said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt. “Chinese data was very supportive but there is caution ahead of this week’s data and results.”
Oil rose early on Monday following Chinese figures showing a 43.9% surge in exports in June from a year earlier, while crude imports in the world’s second-largest energy user rose by a quarter to hit a record high above 22 million tonnes.
At $75 per barrel, oil prices are in the middle of a range identified by both oil producers and consumers as comfortable: high enough to encourage investment and exploration but not too high to bring rampant inflation or damage economic growth.
It is also very close to the average closing price over the last year, which is now around $75.50. At the money implied volatility for the US crude contract has fallen this month to around 31 percent after hitting a peak above 45% in May.
Weather forecasters reported no new signs of foul weather brewing that could hit the Gulf of Mexico, after Tropical Depression No.2 hit Mexico’s coast near the border with Texas on Thursday, missing energy production platforms.
Investors were not as confident about the economic outlook in the second half as they have unwound long positions in the past couple of weeks, analysts said.
Net speculative long positions on NYMEX crude were cut by nearly 20,000 to 74,216 in the week to 6 July, data from the Commodity Futures Trading Commission on Friday showed, the third week of falls.
US crude is well below a 19-month peak above $87 reached in early May but has rebounded sharply from below $65 on 20 May.
Stock markets in Asia rose, after the best week in a year for US equities. The driver this week will be quarterly earnings, which kick off on Monday with the results of aluminium producer Alcoa.
US June retail sales data out on Wednesday will be a key gauge to the country’s economic recovery, said Stephen Schork, president of energy advisory firm the Schork Group.
“If we are to see serious gains from the bulls this week, we will need to see strength in equities, strong retail sales figures and a weaker dollar would not hurt,” he said in a note.