Oil eases below $50, gains capped by mixed US data

Oil eases below $50, gains capped by mixed US data
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First Published: Fri, Apr 17 2009. 10 49 AM IST
Updated: Fri, Apr 17 2009. 10 49 AM IST
Singapore: Oil eased below $50 a barrel on Friday, paring Thursday’s gains as mixed US economic data highlighted the fragile state of a possible recovery in the world’s top energy user.
Crude’s Thursday rise was fuelled by a surge on Wall Street and data that showed the number of US workers filing new claims for jobless benefits unexpectedly fell last week. But continuing claims rose to a record as the recession bit.
Preliminary April consumer sentiment data, due later in the day, could shed light on whether the rate of contraction in the US economy is easing.
By 8:00am, US crude for May delivery was down 17 cents at $49.81 a barrel, after having risen 1.5% to $49.98 earlier. ICE Brent crude for the new front-month of June was up 7 cents at $53.13 a barrel.
Crude has fallen about 4.7% so far this week.
“Crude will probably finish the week around $50 - there’s not a lot of movement in either direction, and demand fundamentals still look increasingly bearish,” said Jim Ritterbusch, president of Ritterbusch and Associates.
“Next week, the market will be watching for the expiration of the WTI May contract on Tuesday, and there’s a strong chance we could break below $47 on the downside.”
The Paris-based International Energy Agency, the US Energy Information Administration and the Organization of Petroleum Exporting Countries or Opec have all cut global oil demand forecasts.
The collapse in demand has seen US crude oil inventories soaring to their highest level in 19 years, gaining 5.6 million barrels last week alone, the EIA’s weekly report showed.
The Reuters/University of Michigan Surveys of Consumers will release its preliminary April consumer sentiment index at 7:25am. Economists in a Reuters poll expect a reading of 58.5 compared with 57.3 in the final March report.
US stocks rallied on Thursday as expectations of reassuring results from bellwethers, including Google, lifted technology shares, while JPMorgan’s better-than-expected profit added to bank stabilisation hopes.
On the supply front, prices were supported by news that Opec seaborne oil exports, excluding Angola and Ecuador, would fall 560,000 barrels per day in the four weeks to May 2, according to the latest estimate by UK consultancy Oil Movements.
Crude prices have tumbled nearly $100 per barrel since last July, as the global recession dented oil demand, but they have recovered in recent months from a low of $32.40 in December.
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First Published: Fri, Apr 17 2009. 10 49 AM IST
More Topics: Markets | Oil | Crude | Commodity | US |