Oil prices ticked lower Monday on a stronger dollar and weak Chinese manufacturing data.
Light, sweet crude for June delivery settled down 22 cents, or 0.4%, at $58.93 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell a penny to $66.45 a barrel on ICE Futures Europe. The WSJ Dollar Index, which tracks the dollar against a basket of other currencies, recently rose 0.2%. A stronger dollar makes oil—which is traded in dollars—more expensive to buyers using foreign currencies.
China’s manufacturing sector posted its weakest performance in a year in April, according to the widely watched HSBC Purchasing Managers Index. China is the second-largest oil-consuming nation, behind the U.S.
China’s oil demand grew by 7.7% in the first quarter compared with the year before, the biggest quarterly increase since 2012, according to Barclays. But “we think the slowing economy will continue to affect demand associated with industrial production, especially diesel,” the bank said in a note.
Data provider Genscape Inc. told clients Monday that crude-oil supplies in Cushing, Okla., fell by less than 100,000 barrels in the week ended Friday, according to a broker, keeping stockpiles in the key storage hub near record highs.
Growing crude-oil inventories have weighed on U.S. prices in recent months, with some traders concerned that Cushing or other storage hubs could reach capacity. Supplies at Cushing fell for the first time this year in the week ended April 24, according to the U.S. Energy Information Administration.
Nationwide, crude-oil supplies are at the highest in more than 80 years, and “it would appear that further U.S. commercial inventory increases lie ahead,” said energy-advisory firm Ritterbusch & Associates in a note.
The market will get a deeper look at the nation’s supplies on Wednesday, when the EIA releases its weekly inventory data.
Gasoline futures settled down 1.14 cents, or 0.6%, at $2.0339 a gallon. Diesel futures fell 0.35 cent, or 0.2%, to $1.9787 a gallon.
Source: The Wall Street Journal