Oil Prices Edge Down
Source: The Wall Street Journal, Edward Welsch (6/1/10)
"The fear is that China may be stalling. . ."
"The market didn't like the [purchasing managers index] numbers out of China overnight, and then all of a sudden this morning we saw some buying coming back in that may have been helped by the U.S. data. . .then it kind of ran out of steam again," said Tom Bentz, a BNP Paribas Commodity Futures broker. "I think the market is just searching for value."
Overnight, crude fell below $72 on the release of weak manufacturing data out of China and weakness in the euro vs. USD due to continued European sovereign-debt fears. But crude briefly staged a comeback midmorning in the U.S., as U.S. manufacturing data was stronger than expected.
In recent trade, light, sweet crude for July delivery was down 65 cents, or 0.9%, at $73.32 a barrel from Friday's close on the NYMEX. North Sea Brent crude on London's ICE futures exchange traded down $1.25 cents, or 1.6%, to $73.40 a barrel.
The U.S. Institute of Supply Management purchasing managers' index fell to 59.7 in May from 60.4 in April, but was a full point better than the market had expected. The ISM said the data showed a rebound in U.S. factories "continues to broaden."
The U.S. data helped crude recover from the release overnight of China's purchasing-managers' index, which fell to 53.9 in May from 55.7 in April.
"The fear is that China may be stalling and that their growth may not be as brisk as people were hoping," said Peter Beutel, president of trading advisory firm Cameron Hanover. "And China's seen as the one part of the world economy that was good."