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Thursday, October 16, 2014

Crude finishes at lowest levels in more than two years

Prices have tumbled 4.7% over the last three sessions 

Crude oil futures ended at fresh multi-year lows on Wednesday, 15 October 2014 at Nymex edging lower amid a broad U.S. equity market selloff that sent investors to the perceived safety of government bonds. Prices fell amid demand concerns. 

Light, sweet crude futures for delivery in November declined six cents, or 0.1%, to settle at $81.78 a barrel. That was New York-traded oil's lowest settlement since June 2012. Prices have tumbled 4.7% over the last three sessions. 

Equity indices stumbled out of the gate to continue the weakness that started in the futures market overnight. Also weighing on sentiment was a trio of disappointing economic reports with retail sales, PPI, and the Empire Manufacturing Index all missing expectations. The data was met with dollar weakness while Treasuries soared. 

The American Petroleum Institute will publish its weekly survey on U.S. oil stockpiles, a day later due to Monday's Columbus Day holiday. The more closely watched inventory data from the U.S. Energy Information Administration is due on Thursday, also a day later. Traders expect stocks to rise. 

In September, Chinese consumer costs rose at the slowest pace since January 2010, and U.S. wholesale prices unexpectedly fell for the first time in a year, separate reports showed today.
Economic data at Wall Street included Retail Sales, PPI, Empire Manufacturing, Business Inventories, and the MBA Mortgage Index. Retail sales declined 0.3% in September following an unrevised 0.6% gain in August, while the consensus expected a downtick of 0.2%. Motor vehicle sales declined 0.8% after increasing 1.9% in July, which was in-line with the decline in per unit sales reported by the motor vehicle manufacturers. Excluding autos, retail sales declined 0.2% in September after increasing an unrevised 0.3% in August, while the consensus expected an increase of 0.3%. 

Producer prices fell 0.1% in September after reporting no change in August, while the consensus expected an increase of 0.1%. As expected, energy prices fell 0.7% in September, which was the third consecutive monthly decline. Food prices fell for the second consecutive month and the fourth time in the last five months, dropping 0.7% after falling 0.5% in August. Excluding food and energy, core PPI was flat after increasing 0.1% in August, while the consensus expected an increase of 0.1%. 

The Empire Manufacturing Survey for October fell to 6.2 from 27.5, while the consensus expected a downtick to 20.4. Also, Business inventories increased 0.2% in August after increasing an unrevised 0.4% in July, while the consensus expected an increase of 0.4%. The weekly MBA Mortgage Index rose 5.6% to follow last week's 3.8% increase. 

Among other energy products, gasoline for November delivery was off 3.15 cents, or 1.4%, to settle at $2.1487 a gallon on Nymex, down for seven consecutive sessions. November heating oil settled at $2.4586 a gallon on Nymex, off 1.36 cents, or 0.6%. 

Natural gas for November delivery lost 1.60 cents, or 0.4%, to settle at $3.8000 per million British thermal units on Nymex. That was the lowest finish for natural gas in nearly six weeks. 
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