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Crude falls after investors take profits from supply report

Published 05/30/2014, 01:48 PM
Updated 05/30/2014, 01:50 PM
Oil falls on profit taking, as market digest bullish supply report
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Investing.com - Crude oil futures fell on Friday after investors locked in gains from Thursday's bullish supply report and sold the commodity for profits.

On the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in July traded at $102.79 a barrel during U.S. trading, down 0.76%. New York-traded oil futures hit a session low of $102.42 a barrel and a high of $103.60 a barrel.

The July contract settled up 0.84% at $103.58 a barrel on Thursday.

Nymex oil futures were likely to find support at $101.27 a barrel, the low from May 15, and resistance at $104.50 a barrel, Tuesday's high.

The U.S. Energy Information Administration reported on Thursday that crude oil inventories rose by 1.657 million barrels last week after falling 7.226 million barrels the week before.

Analysts were expecting crude inventories to rise by 483,000 barrels, though the greater-than-expected build didn't send prices falling due to bullish gasoline figures, which sent prices rising to levels ripe for profit taking.

Gasoline Inventories fell by 1.803 million barrels last week after rising 970,00 barrels the week before.

Analysts were expecting gasoline inventories to rise by 283,000 barrels.

Elsewhere, a mixed bag of U.S. economic indicators softened demand for oil as well.

The revised Thomson Reuters/University of Michigan consumer sentiment index ticked up to 81.9 this month from 81.8 in April, missing market expectations for a reading of 82.5.

Separately, the Commerce Department reported that personal spending in the U.S. fell 0.1% last month, compared to expectations for a 0.2% rise, after a 1.0% increase in March, whose figure was revised from a previously estimated 0.9% gain.

U.S. core personal consumption expenditures, which exclude food and energy, rose 0.2% in April, in line with expectations, after a 0.2% increase the previous month.

In other news, industry data revealed that the Chicago purchasing managers' index rose to a seven-month high of 65.5 in May, from 63.0 in March, confounding expectations for a fall to 61.0.

On Thursday, the Bureau of Economic Analysis reported that the U.S. economy contracted 1.0% in the first quarter after a preliminary estimate showed growth of 0.1%.

Market expectations had been for a 0.5% contraction. It was the first decline in U.S. GDP since the first quarter of 2011.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for July delivery were down 0.52% and trading at US$109.40 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$6.61 a barrel.

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