WTI Trades Near Week-LowBen Sharples and Rupert Rowling
West Texas Intermediate crude dropped for the fourth time in five days as economic data may signal slowing growth in the U.S., the world’s biggest oil consumer. Brent declined in London.
Futures fell as much as 0.8 percent to $101.27 a barrel in New York, extending a drop of 1 percent last week. A preliminary index of U.S. service industries is forecast to drop to 59.8 for July, a Bloomberg News survey showed before a report from Markit Economics today. The Federal Reserve is scheduled to review monetary policy at a two-day meeting starting tomorrow.
“Demand expectations are likely to remain weak and exert downward pressure in what is a big week for U.S. data,” said Michael Hewson, market analyst at London-based CMC Markets Plc. “Markets are expecting much more positive news out of the U.S. than is likely and this could well see U.S. prices slip back towards $100.”
WTI for September delivery dropped 65 cents to $101.44 on the New York Mercantile Exchange as of 1:16 p.m. London time. The volume of all futures traded was about 23 percent below the 100-day average for the time of day. Prices have fallen 3.8 percent in July.
Brent for September settlement slid as much as 98 cents, or 0.9 percent, to $107.41 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.11 a barrel to WTI. The spread closed at $6.30 on July 25, the widest since July 7.
WTI slid last week after government data showed gasoline stockpiles rose to a four-month high, fueling speculation of slowing demand. The U.S. will account for about 21 percent of global oil consumption this year, almost double that of China, the second-biggest user, estimates from the International Energy Agency in Paris show.
Markit’s preliminary gauge of U.S. services is projected to decrease from a final level of 61 in June, according to the Bloomberg survey. Readings above 50 signal expansion.
The Commerce Department is scheduled to report the nation’s gross domestic product for the second quarter on July 30, while the Labor Department will publish monthly data on nonfarm payrolls on Aug. 1.
Hedge funds and other large speculators boosted their net-long positions on WTI by 7.3 percent to 278,116 futures and options combined in the week ended July 22, according to the Commodity Futures Trading Commission. That’s the first increase in five weeks.
In London, hedge funds and other money managers cut bullish bets on Brent by 34,786 contracts in the week ended July 22, according to ICE Futures Europe.