Published: Fri, July 05, 2019
Markets | By Otis Pena

Crude oil futures fall 0.15% on global cues

Crude oil futures fall 0.15% on global cues

Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang province, China December 7, 2018.

Even though news that would normally be encouraging to the global crude sector has been reported steadily for the past week, it took the most fleeting of supportive disclosures - a decline in USA rig counts - for prices to finally escalate on Wednesday, by 2.3 percent in the case of an worldwide benchmark.

USA crude futures for August were up 47 cents at $56,72 a barrel. WTI closed up 1.9 percent on Wednesday. Prices increased 2.3% on Wednesday.

Trading volumes were light due to the July 4 holiday in the United States.

Front-month Brent crude oil futures were down 49 cents, or 0.77%, to $63.33 per barrel by 0830 GMT.

At 468.5 million barrels, USA crude oil inventories were about 5 percent above the five-year average for this time of year.

"The inventory data by no means argue in favor of higher prices: not only did the crude oil inventory reduction prove smaller than expected - it also fell noticeably short of that reported by the API the day before", Commerzbank wrote in a note to clients.

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Last week, the EIA stated USA crude oil manufacturing had surged to 12.16 million bpd during Could, a record-high cementing the nation's place because of the world's top crude oil producers.

That fact suggests oil demand in the US, the world's biggest crude consumer, could be slowing amid signs of a weakening economy.

In the United States, new orders for factory goods fell for a second straight month in May while shipments barely rose, pointing to continued weakness in manufacturing.

The weak United States data followed a report of slow business growth in Europe last month as well.

Plus, the crude market continues to be dogged by the usual worries: "We had a pretty sharp correction yesterday, so after that a little rebound is expected; globally, the market is concerned about oil demand growth potential", said Olivier Jakob, founder of Petromatrix.

Futures lost as much as 1.5 percent in NY as anxieties over demand resurfaced this week following a slew of sluggish economic indicators from the U.S., China and Europe, even as the Organization of Petroleum Exporting Countries and its allies agreed to extend output cuts.

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