West Texas Intermediate crude traded near the lowest price in a week amid speculation that economic data may signal slowing growth in the US, the world’s biggest oil consumer. Brent declined in London.
Futures were little changed in New York after losing 1% last week. A preliminary index of US service industries is forecast at 59.8 for July, the lowest level in three months, a Bloomberg News survey showed before a report from Markit Economics Ltd. today. The Federal Reserve is scheduled to review monetary policy at a two-day meeting starting tomorrow.
“There’s some book-squaring ahead of a potentially large data week,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone today. “The near-term trend is down. The 200-day moving average is at about $100, which is probably the center of gravity for West Texas.”
WTI for September delivery was at $102 a barrel on the New York Mercantile Exchange, down 9 cents, at 4.48pm Sydney time. The contract closed at $102.07 on July 24, the lowest level since July 16. The volume of all futures traded was about 2% below the 100-day average. Prices have fallen 3.2% in July, the most in eight months.
Brent for September settlement dropped as much as 60 cents, or 0.6%, to $107.79 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.04 to WTI. The spread closed at $6.30 on July 25, the widest since July 7.
WTI slid last week after government data showed gasoline stockpiles rose to a four-month high, fueling speculation of slowing demand. The US will account for about 21% of global oil consumption this year, almost double that of China, the second-biggest user, estimates from the International Energy Agency in Paris show.
Markit’s preliminary gauge of services is projected to decrease from a final level of 61 in June, according to the Bloomberg survey. Readings above 50 signal expansion.
The Commerce Department is scheduled to report the nation’s gross domestic product for the second quarter on July 30, while the Labor Department will publish monthly data on nonfarm payrolls on Aug. 1.
Hedge funds and other large speculators boosted their net- long positions on WTI by 7.3% to 278,116 futures and options combined in the week ended July 22, according to the Commodity Futures Trading Commission. That’s the first increase in five weeks.
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