NEW YORK (Reuters) – U.S. crude futures were slightly lower on Thursday, drawing some support from the stock market after earlier touching nearly two-month lows on weak economic data.
FILE PHOTO: The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France September 17, 2019. REUTERS/Christian Hartmann/File Photo
U.S. crude CLc1 settled at $52.45 a barrel, down 19 cents. Global benchmark Brent crude LCOc1 settled up 2 cents at $57.71 a barrel.
During the session, both benchmarks tumbled to the lowest level seen since early August, plunging as weak U.S. economic figures were released.
U.S. services sector growth slowed to its most anemic pace in three years last month, and job growth in the largest slice of the American economy was the weakest in half a decade, a survey of purchasing managers showed.
Even as U.S. crude pared losses late in the day, crude futures have found lower lows in each of the last eight sessions, said Bob Yawger, director of energy futures at Mizuho in New York.
“From both a supply and demand situation it seems to be a problem: storage is the supply side, economic data is the demand side and they’re both on the wrong side of the letter,” Yawger said.
Across the Atlantic, economic data has also put pressure on crude. Euro zone business growth stalled in September, a survey on Thursday showed. [nZRNBMOU04]
Lending oil some support were hopes that the United States and China might make progress in resolving their trade dispute and figures showing output in the United States – which has been the fastest source of supply growth – fell in July.
“Next week U.S.-China trade talks remain the unknown variable which could lend a modicum of support,” said Stephen Innes, market strategist at AxiTrader. The talks are set to resume on Oct. 10.
This year, Brent has risen about 7%, supported by supply cuts led by the Organization of the Petroleum Exporting Countries and allies including Russia, plus involuntary outages such as a drop in Iranian and Venezuelan exports due to U.S. sanctions.
Nonetheless, concern about the worsening economic outlook has overshadowed support from the supply side and the prospect of further output disruption in the Middle East appears of limited concern to investors.
Brent spiked to $72 a barrel on Sept. 16 following attacks on Saudi Arabia’s oil installations that shut more than half of the country’s output. But both oil benchmarks are now below their pre-attack levels after the Saudi authorities resumed output.
“Crude oil does not want to price a geopolitical premium,” said Olivier Jakob, analyst at Petromatrix. “With the lack of strong economic data, it is difficult to develop a bullish theme.”
Additional reporting by Roslan Khasawneh in Singapore and Alex Lawler in London ; Editing by Marguerita Choy and Jason Neely
This post was originally posted on Reuters: Business News – View Original Article