Oil Trades Near $73 After Falling Past Four Days on Slower Economic Growt
Crude oil traded around $73 a barrel in New York, heading for its first weekly decline in four, before a U.S. report that may show the world’s biggest economy lost jobs for the first time this year.
U.S. payrolls declined by 130,000 last month, according to the median estimate of 82 economists surveyed by Bloomberg News. The Labor Department publishes its report today at 8:30 a.m. in Washington. Oil may fall next week on growing concern the U.S. economic recovery is faltering, a Bloomberg News survey showed.
“Oil is driven by other asset classes and very broad economic factors, which will indirectly affect oil demand in the future,” said Hannes Loacker, a Raiffeisen Zentralbank Oesterreich analyst in Vienna. “There are no real changes in oil fundamentals. The correlation to risky asset classes such as equities will remain strong.”
Oil for August delivery dropped 1 cent to $72.94 a barrel in electronic trading on the New York Mercantile Exchange at 11:44 a.m. London time. Brent crude for August climbed 11 cents to $72.45 a barrel on the ICE Futures Europe exchange in London.
Crude fell 7.5 percent in the past four days, touching a three-week low of $72.05 yesterday, amid concern the economic recovery in the U.S. and China will slow and curb demand in the world’s two largest energy consumers. China yesterday reported slowing manufacturing expansions.
“China is very important and the last data gave a rather mixed picture,” Loacker said.
Twenty of 38 analysts, or 53 percent, surveyed by Bloomberg forecast crude will decline through July 9. Ten respondents, or 26 percent, predicted that futures will be little changed and eight saw an increase. Last week an equal number of analysts predicted a gain or drop.
Crude has yet to pass key price support levels, meaning it may resume an uptrend above $75 a barrel in coming days, technical analysts at National Australia Bank Ltd. said.
Oil in New York will continue in a “messy, choppy, sideways range,” and $72 a barrel will present short-term support, said Gordon Manning, a Sydney-based technical analyst at Australia’s fourth-largest bank. While prices tumbled 3.5 percent yesterday, the most in a month, the market remains in a technical uptrend, he said.
“On the daily chart it’s still slightly positive,” Manning said today in a telephone interview. “If August gets up through $73, I wouldn’t be surprised to see a rally back up to $75, $76.”