Investing.com – Crude oil futures pared sharp losses on Tuesday, bouncing off a seven-day low after a report showed that service sector activity in the U.S. rose unexpectedly in August.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at USD84.89 a barrel during U.S. morning trade, dropping 1.8%.
It earlier fell as much as 3.5% to trade at USD83.22 a barrel, the lowest price since August 26.
The U.S. Institute of Supply Management said earlier that its non-manufacturing purchasing managers’ index rose by 0.6 points to 53.3 in August from 52.7 in July. Analysts had expected the index to decline to 51.0 in August.
On the index, a reading above 50.0 indicates the non-manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting.
Crude prices were down sharply earlier as fears that the U.S. is slipping back into a recession raised concerns over a slowdown in oil demand from the world’s largest crude consumer.
Strength in the U.S. dollar also weighed, as the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.6% to hit 75.66, after rising earlier to 75.88, the highest since July 18.
Markets were awaiting fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report on Wednesday, while Thursday’s government report could show stockpiles climbed by 0.8 million barrels last week, while gasoline stockpiles were projected to fall by 0.9 million barrels.
The Energy Department is scheduled to release its weekly stockpile report on September 8, a day late because of the Labor Day holiday.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery rose 1.45% to trade at USD111.67 a barrel. The spread between the two contracts widened to USD26.78 a barrel, re-approaching the record high of USD26.97 it hit on September 2.
Nymex floor trading was shut yesterday for the Labor Day holiday and electronic trades will be booked with today’s transactions for settlement purposes.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at USD84.89 a barrel during U.S. morning trade, dropping 1.8%.
It earlier fell as much as 3.5% to trade at USD83.22 a barrel, the lowest price since August 26.
The U.S. Institute of Supply Management said earlier that its non-manufacturing purchasing managers’ index rose by 0.6 points to 53.3 in August from 52.7 in July. Analysts had expected the index to decline to 51.0 in August.
On the index, a reading above 50.0 indicates the non-manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting.
Crude prices were down sharply earlier as fears that the U.S. is slipping back into a recession raised concerns over a slowdown in oil demand from the world’s largest crude consumer.
Strength in the U.S. dollar also weighed, as the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.6% to hit 75.66, after rising earlier to 75.88, the highest since July 18.
Markets were awaiting fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report on Wednesday, while Thursday’s government report could show stockpiles climbed by 0.8 million barrels last week, while gasoline stockpiles were projected to fall by 0.9 million barrels.
The Energy Department is scheduled to release its weekly stockpile report on September 8, a day late because of the Labor Day holiday.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery rose 1.45% to trade at USD111.67 a barrel. The spread between the two contracts widened to USD26.78 a barrel, re-approaching the record high of USD26.97 it hit on September 2.
Nymex floor trading was shut yesterday for the Labor Day holiday and electronic trades will be booked with today’s transactions for settlement purposes.