Heating oil slid on concern that U.S. economic growth is stalled and that European leaders won’t reach a consensus on how to contain the region’s debt crisis, which is threatening the global recovery and fuel demand.
Futures fell as the U.S. economy grew 1.9 percent in the first quarter, less than the 3 percent gain the prior quarter, Commerce Department figures showed. First-time jobless claims fell 6,000 to 386,000 last week, hovering near the highest level of the year, the Labor Department reported. European leaders are meeting at an economic summit in Brussels today.
“Everybody is waiting to see if the Europeans come up with some kind of plan to avert further problems in their peripheral countries,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We continue to see signs the U.S. recovery is stalled.”
Heating oil for July delivery fell 4.18 cents, or 1.6 percent, to settle at $2.5519 a gallon on the New York Mercantile Exchange, the first drop in five days. Prices have lost 5.7 percent this month and are down 19 percent since March 30. The more actively traded August contract declined 4.3 cents to $2.5472.
July-delivery gasoline lost 0.62 cent to settle at $2.6142 a gallon. Prices have fallen 7.5 percent this month and are down 23 percent in the quarter. The contract is for reformulated gasoline, or RBOB. The August contract retreated 2.16 cents, or 0.9 percent, to $2.4773.
Heating oil and gasoline contracts for July delivery will expire at the close of floor trading tomorrow.
The prior week’s jobless claims reading was revised up to 392,000 from 387,000, matching an April figure as the steepest of 2012. Payrolls in May expanded by 69,000 workers, the slowest pace in a year, and have cooled each month since January.
“In the U.S., we’ve ruined our streak of better-than-expected economic data and the market is not expecting a lot of progress from the economic summit in Europe,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago.
European Union leaders focused on immediate help for Spain and Italy at the start of a two-day summit intended to chart a path out of their financial crisis.
The 27 government chiefs will discuss buying Spanish and Italian government bonds to bring down borrowing costs that are near euro-era records, Finnish Prime Minister Jyrki Katainen said. German Chancellor Angela Merkel, leader of the region’s largest economy, opposes any kind of risk sharing, putting her in opposition to leaders of France, Italy and Spain, who favor joint euro-area bonds and measures to spur growth.
“The market is looking for its next move out of the EU summit, waiting to see if its pessimistic view should be confirmed or not,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
Regular gasoline at the pump, averaged nationwide, fell 1.4 cents to $3.369 a gallon yesterday, according to AAA. It was the lowest level since Jan. 6.