Oil prices end down after stock market fails to rebound
Oil prices end down after stock market fails to rebound
Oil prices settled lower Friday as traders watched the stock market decline even further, renewing concerns that economic growth may stall.
The tenuous stock market saga overshadowed tightening gasoline supplies that helped push oil's Thursday settlement price to a more than two month high.
Light, sweet crude for April delivery fell 36 cents to settle at $61.64 a barrel on the New York Mercantile Exchange. Earlier, the contract fell to an intraday low of $61.35 after the Dow Jones industrials dropped by more than a 100 points. The Dow was trading at 12,158.08, down 76.26 points, in afternoon trading.
Brent crude for April lost 3 cents to settle at $62.08 a barrel on the ICE Futures exchange in London.
“Oil is a horse that wants to break out of the gate, but can't until the stock market figures itself out,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
Tim Evans, an energy analyst with Citigroup Futures Research, pointed out that trading was light on Friday and most investors typically don't take on new positions ahead of the weekend.
“I think the stock market is one issue among many,” Evans said. “Certainly, as a comparison, the oil market is showing good underlying strength in the face of a weak stock market and commodity markets.”
On Thursday, crude oil rose 21 cents to settle at $62 a barrel – its highest settlement price since Dec. 22 – following a rally in gasoline futures, which rose on reports of a glitch at a Valero Energy Corp. refinery. Valero said operations at its Port Arthur, Texas, refinery were normal, despite the reported outage of a unit.
Gasoline failed to hold onto gains it made on Thursday and slipped less than a penny to settle at $1.9018 a gallon.
Market participants were also focusing on the outlook for gasoline supply entering the peak spring and summer driving season. Problems at U.S. refineries have reduced output and cut into petroleum product supplies.
On Wednesday, the U.S. Department of Energy reported that stockpiles of gasoline and distillates, which include heating oil and diesel fuel, dropped last week by a larger amount than analysts had forecast. Meanwhile, demand for products over the last four-week period rose by 7.5 percent from the same period last year.
U.S. crude inventories climbed 1.4 million barrels to 329.0 million barrels last week. But gasoline inventories fell by 1.9 million barrels to 220.2 million barrels, and distillate inventories fell by 3.8 million barrels to 124.5 million barrels.
Worries over Iran's persistent refusal to suspend its nuclear program remain on oil traders' minds too, analysts said.
“There's a lot of focus on what's happening with Iran. Tensions over any possible sanctions are obviously positive for oil prices,” said Andrew Harrington, an analyst with ANZ Global Natural Resources in Sydney.
Washington is pushing for tougher U.N. sanctions on Tehran over its failure to comply with demands to halt its uranium enrichment program that the West fears could be used to build a nuclear weapon. Although the United States has said it has no plans to strike Iran militarily, it has also refused to rule out any option.
In other Nymex trading, heating oil futures fell nearly a penny to settle at $1.7682 a gallon, while natural gas prices fell 4.5 cents to $7.243 per 1,000 cubic feet.
By J.W. Elphinstone ASSOCIATED PRESS
