Crude oil fell on Tuesday. Data from the United States and China, key consumers for oil, may determine monetary policy makers to extend their stimulus programs to support their economies; therefore markets are turning their attention now to the U.S. nonfarm payrolls report on Friday.
The U.S. manufacturing activity slowed in May to the lowest in nearly 4-years. This report followed figures showing factory activity in China shrank for the first time in seven months, supporting speculations that economic growth is slowing, which could hamper oil demand.
“Oil will remain unstable because of speculation over the Fed`s quantitative easing. Fundamentally oil is very weak while supplies are ample and demand growth is slowing”, said Yusuke Seta from Newedge Japan.
- Crude is trading at the time of writing around $93.05 a barrel with the highest at $93.34, and the lowest at $92.88
- Brent is trading around $101.90 a barrel after falling 0.16% or $0.16
Oil is also under pressure as crude inventories are expected to rise further in the U.S. The EIA report might show crude inventories probably shrank 650,000 barrels last week. Gasoline inventories probably rose 600.000 barrels, while distillates probably rose 1.3 million barrels.
Meanwhile, the American Petroleum Institute (API) report, which is released one day before the U.S. Department of Energy`s Administration (EIA) report, may show that crude stocks probably fell 200,000 barrels.
Inventors will be watching the Turkish markets as civil unrest persists for another day, increasing the tensions in the Middle East. Focus will also be on the shut down North Sea Buzzard oilfield.
- Natural gas is trading at $3.971 per cubic feet after falling 0.50%
- Gasoline is trading at $2.7873 a gallon after rising 0.08%
- Heating oil is trading at $2.8369 a gallon after rising 0.12%