Crude futures settled lower again Thursday as weak US employment data and a strong dollar for part of the trading day put downward pressure on the oil complex.
NYMEX May crude settled $1.19 lower at $93.26/barrel after bouncing from an intra-day low of $92.12/b during the last hour of US trade. The front-month contract has dropped about 4% over the last two days.
ICE May Brent closed the day down 77 cents at $106.34/b. The front-month contract bottomed out at $105.29/b in the afternoon session — its lowest level since November 5, 2012 — before rebounding slightly late in the day.
“The string of weaker US data, today the initial jobless claims, ahead of tomorrow’s job report, together with a dovish [Mario] Draghi at the [European Central Bank] press conference has triggered another leg down in crude oil,” Saxo Bank commodities analyst Ole Hansen said in a note.
The ICE Brent contract has shed 4.27% in the last three days.
Initial US jobless claims climbed over the week ended March 30, data from the Bureau of Labor Statistics showed Thursday, rising 28,000 claims on the week to 385,000. Continuing jobless claims nudged downwards to 3.063 million.
Additionally, the US dollar rose sharply during overnight trade to hit its highest level since August at 83.494 after the Bank of Japan voted to maintain interest rates at 0.10% while recommitting to a strong monetary easing program. The dollar was up more than 3.3% against the yen at the 2:30 p.m. EDT (1830 GMT) NYMEX settle.
The US dollar index — which measures the strength of the dollar against a basket of international currencies — slipped after both the euro and the UK pound pushed higher in afternoon US trade, coinciding with the late afternoon uptick in crude prices. At the NYMEX settle, the dollar index was down 0.09% at 82.640.
Both the European Central Bank and the Bank of England held interest rates steady at 0.75% and 0.50%, respectively.
“There has been some fundamental pressure to the downside [in oil prices] regardless,” Schneider Electric commodities analyst Jacob Correll said. “We’ve had some pretty bad economic data, particularly out of the eurozone…We saw some softening last year around this time.”
The distillate complex dropped particularly sharply during afternoon trade — ICE April gasoil fell to $885.25/mt, the front-month’s lowest level since late July — before rebounding as crude prices bounced off session lows.
NYMEX May heating oil settled 3.84 cents lower at $2.9636/gal, up from an intra-day low of $2.9345/gal. ICE April gasoil was $20/mt lower at $892.75/mt at the NYMEX settle.
NYMEX May RBOB closed 1.53 cents lower at $2.8987/gal, tempering its slide relative to crude prices after shedding 4.17% during Wednesday’s selloff.
US equities markets recovered slightly from Wednesday’s drop. At 2:30 p.m. EDT, the Dow Jones Industrial Average was 0.4% higher at 14,609.2, while the Standard & Poor’s 500 was up 0.37% at 1,559.41.
Source: platts.com
