Oil Futures Weighed by Demand Worries, OPEC Output

Oil futures settled lower for the third straight session, weighed by concerns over weakening demand in China and robust global production.

Futures headed lower after data released Monday showed Chinese industrial output in April came in at 9.3% above last year's level--an improvement over a tepid March reading but under the 9.5% forecast by analysts surveyed by The Wall Street Journal.

The report was the latest underscoring slowing economic growth in China, which in turn has left the oil market worried demand for crude-oil is slowing there, too. China is the world's fastest-growing large economy and the boom has fueled a rise in oil prices over the last several years.

"The Chinese data today started us off on the defensive," said Andy Lebow, senior vice president of energy futures at Jefferies Bache in New York. "We're going to really need some demand growth in the second half [of the year] to suck up the increased crude production."

Light, sweet crude for June delivery settled 87 cents, or 0.9%, lower at $95.17 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange recently settled $1.09, or 1%, lower at $102.82 a barrel.

Monday's fall is the latest decline in crude prices, as signs of strong supply in the U.S. and elsewhere keep a lid on gains. Year to date, crude futures have barely budged, up just 3.65% since the start of 2013.

On Monday, the Organization of the Petroleum Exporting Countries raised its strongest concerns yet this year about weakening oil demand in China. It cut its estimate for Chinese oil demand growth in the first quarter by 20,000 barrels a day, saying weaker-than-expected economic growth in China "may dent oil demand consumption."

Research service Platts estimated OPEC raised crude output by 25,000 barrels a day to 30.5 million barrels a day in April. The increase marked the end of a recent trend of lower production. The service said output had fallen by nearly a million barrels a day between October and March.

Platts said the increase was driven by higher output from Saudi Arabia, the biggest producer, and Iraq, the No. 2 producer. The group's next meeting in Vienna scheduled for May 31

Meanwhile, many oil-market observers remained concerned about the effect of a wind-down of monetary stimulus measures at the U.S. Federal Reserve. The Wall Street Journal reported on Friday that Fed officials had mapped out a strategy for winding down its $85 billion-a-month easing program.

An end to the measure would likely entail more support for the U.S. dollar, which typically weakens oil prices by making the commodity more expensive to global buyers.

The ICE Dollar Index, which tracks the greenback against a basket of currencies, was recently up 0.1% at 83.340.

Front-month June reformulated gasoline blendstock, or RBOB, settled 3.93 cents, or 1.4%, lower at $2.8210 a gallon. June heating oil settled 1.52 cents, or 0.5%, lower at $2.8910 a gallon.

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Oil Futures Weighed by Demand Worries, OPEC Output

Oil futures settled lower for the third straight session, weighed by concerns over weakening demand in China and robust global production.

Futures headed lower after data released Monday showed Chinese industrial output in April came in at 9.3% above last year's level--an improvement over a tepid March reading but under the 9.5% forecast by analysts surveyed by The Wall Street Journal.

The report was the latest underscoring slowing economic growth in China, which in turn has left the oil market worried demand for crude-oil is slowing there, too. China is the world's fastest-growing large economy and the boom has fueled a rise in oil prices over the last several years.

"The Chinese data today started us off on the defensive," said Andy Lebow, senior vice president of energy futures at Jefferies Bache in New York. "We're going to really need some demand growth in the second half [of the year] to suck up the increased crude production."

Light, sweet crude for June delivery settled 87 cents, or 0.9%, lower at $95.17 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange recently settled $1.09, or 1%, lower at $102.82 a barrel.

Monday's fall is the latest decline in crude prices, as signs of strong supply in the U.S. and elsewhere keep a lid on gains. Year to date, crude futures have barely budged, up just 3.65% since the start of 2013.

On Monday, the Organization of the Petroleum Exporting Countries raised its strongest concerns yet this year about weakening oil demand in China. It cut its estimate for Chinese oil demand growth in the first quarter by 20,000 barrels a day, saying weaker-than-expected economic growth in China "may dent oil demand consumption."

Research service Platts estimated OPEC raised crude output by 25,000 barrels a day to 30.5 million barrels a day in April. The increase marked the end of a recent trend of lower production. The service said output had fallen by nearly a million barrels a day between October and March.

Platts said the increase was driven by higher output from Saudi Arabia, the biggest producer, and Iraq, the No. 2 producer. The group's next meeting in Vienna scheduled for May 31

Meanwhile, many oil-market observers remained concerned about the effect of a wind-down of monetary stimulus measures at the U.S. Federal Reserve. The Wall Street Journal reported on Friday that Fed officials had mapped out a strategy for winding down its $85 billion-a-month easing program.

An end to the measure would likely entail more support for the U.S. dollar, which typically weakens oil prices by making the commodity more expensive to global buyers.

The ICE Dollar Index, which tracks the greenback against a basket of currencies, was recently up 0.1% at 83.340.

Front-month June reformulated gasoline blendstock, or RBOB, settled 3.93 cents, or 1.4%, lower at $2.8210 a gallon. June heating oil settled 1.52 cents, or 0.5%, lower at $2.8910 a gallon.

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Crude Settles Lower on Cyprus Worries

Crude-oil futures prices settled weaker Thursday, knocked lower by concerns over the ongoing debt crisis in Cyprus and worries it could spread further into Europe.

Traders said high U.S. oil inventories and weak demand in the world's biggest oil consumer also kept prices down.

The European Central Bank has warned it won't extend beyond Monday the emergency funding that has kept Cypriot banks in operation while a bailout plan was being negotiated. The Cypriot Parliament rejected an earlier package that included a tax levy on bank accounts in the island nation, fueling fears of a run on banks, which have been ordered to close this week.

Worries about Cyprus sparked fears debt problems could flare anew elsewhere in Europe and have weighed on the euro, sending the common currency down against the dollar. In times of dollar strength, some investors using foreign currencies avoid dollar-based investments such as oil futures as they become pricier due to currency issues.

"Cyprus is completely unresolved" and people are becoming "a little more cautious" about buying crude-oil futures, said Peter Donovan, vice president at Vantage Trading.

Mark Waggoner, president of Excel Futures, said the oil market was overbought and in need of a correction. But he expects prices will recover once the market is no longer "spooked" over Cyprus. That front-month Nymex crude held above its 20-day average on trading charts of $92.29 a barrel signaled potential for recovery, he said.

Light, sweet crude oil for May delivery on the New York Mercantile Exchange settled 1.1%, or $1.05 lower, at $92.45 a barrel. May ICE North Sea Brent crude oil fell $1.25 to $107.47 a barrel.

For the second time this week, Brent's premium to the U.S. benchmark narrowed to the lowest level since last July. The spread was $15.02 a barrel Thursday.

Brent crude supplies have been rising after output snags have been resolved, and are facing increased competition from higher flows of similar grades of oil from West Africa. Shell said Thursday it was restoring shipments of Bonny Light crude after a pipeline was shut earlier this month after being damaged in an attempted oil theft.

At the same, more U.S. outlook is making its way to the U.S. Gulf refining region by pipeline and rail, where it competes directly with imports, putting further pressure on Brent and similar crudes.

The Energy Information Administration reported Wednesday U.S. crude-oil stocks fell by 1.3 million barrels last week, while analysts expected a 1.7-million barrel rise. The surprise decline followed nine straight weeks of increases that plumped up inventories by 24 million barrels.

But even with the decline, crude stocks, at near 383 million barrels, are unusually high and 12% above the five-year average for this time of year, the biggest surplus in two months. At the same time, the EIA said U.S. oil demand dropped last week to its lowest level since January.

April-delivery reformulated blendstock gasoline futures settled 4.57 cents lower, at $3.0706 a gallon, while April heating oil rose 0.42 cent, to settle at $2.8963 a gallon.

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Crude Settles Lower on Cyprus Worries

Crude-oil futures prices settled weaker Thursday, knocked lower by concerns over the ongoing debt crisis in Cyprus and worries it could spread further into Europe.

Traders said high U.S. oil inventories and weak demand in the world's biggest oil consumer also kept prices down.

The European Central Bank has warned it won't extend beyond Monday the emergency funding that has kept Cypriot banks in operation while a bailout plan was being negotiated. The Cypriot Parliament rejected an earlier package that included a tax levy on bank accounts in the island nation, fueling fears of a run on banks, which have been ordered to close this week.

Worries about Cyprus sparked fears debt problems could flare anew elsewhere in Europe and have weighed on the euro, sending the common currency down against the dollar. In times of dollar strength, some investors using foreign currencies avoid dollar-based investments such as oil futures as they become pricier due to currency issues.

"Cyprus is completely unresolved" and people are becoming "a little more cautious" about buying crude-oil futures, said Peter Donovan, vice president at Vantage Trading.

Mark Waggoner, president of Excel Futures, said the oil market was overbought and in need of a correction. But he expects prices will recover once the market is no longer "spooked" over Cyprus. That front-month Nymex crude held above its 20-day average on trading charts of $92.29 a barrel signaled potential for recovery, he said.

Light, sweet crude oil for May delivery on the New York Mercantile Exchange settled 1.1%, or $1.05 lower, at $92.45 a barrel. May ICE North Sea Brent crude oil fell $1.25 to $107.47 a barrel.

For the second time this week, Brent's premium to the U.S. benchmark narrowed to the lowest level since last July. The spread was $15.02 a barrel Thursday.

Brent crude supplies have been rising after output snags have been resolved, and are facing increased competition from higher flows of similar grades of oil from West Africa. Shell said Thursday it was restoring shipments of Bonny Light crude after a pipeline was shut earlier this month after being damaged in an attempted oil theft.

At the same, more U.S. outlook is making its way to the U.S. Gulf refining region by pipeline and rail, where it competes directly with imports, putting further pressure on Brent and similar crudes.

The Energy Information Administration reported Wednesday U.S. crude-oil stocks fell by 1.3 million barrels last week, while analysts expected a 1.7-million barrel rise. The surprise decline followed nine straight weeks of increases that plumped up inventories by 24 million barrels.

But even with the decline, crude stocks, at near 383 million barrels, are unusually high and 12% above the five-year average for this time of year, the biggest surplus in two months. At the same time, the EIA said U.S. oil demand dropped last week to its lowest level since January.

April-delivery reformulated blendstock gasoline futures settled 4.57 cents lower, at $3.0706 a gallon, while April heating oil rose 0.42 cent, to settle at $2.8963 a gallon.

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Gasoline Futures Slump as Northeast Supply Worries Ease

Gasoline futures prices tumbled 4.2% Wednesday to a one-month low, a hopeful sign for drivers, after data from the U.S. Energy Information Administration offered an improving outlook for domestic fuel supplies.

Government data released Wednesday showed that refineries are returning to their work of churning out fuel after a period of maintenance work, raising oil processing by 335,000 barrels a day last week. The increasing activity helped push gasoline stockpiles higher in the key Northeast region, where refinery shutdowns over the past year have raised concerns about shortages.

Hit by Hurricane Sandy, gasoline stocks in the Northeast had dropped to as much as 19.3% below year-earlier levels at the end of November, sending futures higher and raising prices at the pump. Now, they are bouncing back. Gasoline stocks in the region are at the highest level since last March and have gained 35% since mid-December.

Gasoline futures have fallen over 7% this week and the surge in retail prices over the past month is slowing, which has some analysts expecting lower prices for drivers. Retail U.S. gasoline prices averaged $3.786 a gallon Wednesday, according to AAA's daily Fuel Gauge Report, up just 0.4 cent from Tuesday. A month ago, gasoline averaged $3.349 a gallon.

"The product is now getting to the market," said Stephen Schork, head of energy-consultancy Schork Group. "Prices at the retail level should start to moderate."

March-delivery reformulated-blendstock for oxygenate blending, or RBOB, futures fell 12.51 cents to settle at $2.8565 a gallon on the New York Mercantile Exchange in the largest one-day percentage decline since December, 2011.

March-delivery gasoline meets the winter-grade fuel standard, while April gasoline must meet a cleaner-burning summer-grade standard. Gasoline futures for April delivery settled 2.9% lower Wednesday at $3.1063 a gallon.

Crude-oil futures finished with slight gains, settling 13 cents higher at $92.76 a barrel on the Nymex. ICE Brent crude futures settled 84 cents, or 0.8%, lower at $111.99 a barrel.

The EIA reported crude-oil stocks rose last week by 1.13 million barrels, less than an anticipated rise of 2.5 million barrels. And increasing refinery operations could signal rising demand for crude to turn into gasoline and other fuels. Still, stocks at 377.5 million barrels are the highest since last July and are the most on record for this time of year since EIA data began in 1982.

The sharp increase in gasoline futures over the past month also contributed to this week's steep decline, according to market watchers. Indications of strong regional supplies just ahead of Thursday's expiration of the March gasoline-futures contract helped spurred the dramatic skid.

"We're seeing more pullback after huge advances," said Kyle Cooper, managing partner at IAF Advisors in Houston.

March heating-oil futures settled 4.38 cents, or 1.4%, lower at $2.9879 a gallon.

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Gasoline Futures Slump as Northeast Supply Worries Ease

Gasoline futures prices tumbled 4.2% Wednesday to a one-month low, a hopeful sign for drivers, after data from the U.S. Energy Information Administration offered an improving outlook for domestic fuel supplies.

Government data released Wednesday showed that refineries are returning to their work of churning out fuel after a period of maintenance work, raising oil processing by 335,000 barrels a day last week. The increasing activity helped push gasoline stockpiles higher in the key Northeast region, where refinery shutdowns over the past year have raised concerns about shortages.

Hit by Hurricane Sandy, gasoline stocks in the Northeast had dropped to as much as 19.3% below year-earlier levels at the end of November, sending futures higher and raising prices at the pump. Now, they are bouncing back. Gasoline stocks in the region are at the highest level since last March and have gained 35% since mid-December.

Gasoline futures have fallen over 7% this week and the surge in retail prices over the past month is slowing, which has some analysts expecting lower prices for drivers. Retail U.S. gasoline prices averaged $3.786 a gallon Wednesday, according to AAA's daily Fuel Gauge Report, up just 0.4 cent from Tuesday. A month ago, gasoline averaged $3.349 a gallon.

"The product is now getting to the market," said Stephen Schork, head of energy-consultancy Schork Group. "Prices at the retail level should start to moderate."

March-delivery reformulated-blendstock for oxygenate blending, or RBOB, futures fell 12.51 cents to settle at $2.8565 a gallon on the New York Mercantile Exchange in the largest one-day percentage decline since December, 2011.

March-delivery gasoline meets the winter-grade fuel standard, while April gasoline must meet a cleaner-burning summer-grade standard. Gasoline futures for April delivery settled 2.9% lower Wednesday at $3.1063 a gallon.

Crude-oil futures finished with slight gains, settling 13 cents higher at $92.76 a barrel on the Nymex. ICE Brent crude futures settled 84 cents, or 0.8%, lower at $111.99 a barrel.

The EIA reported crude-oil stocks rose last week by 1.13 million barrels, less than an anticipated rise of 2.5 million barrels. And increasing refinery operations could signal rising demand for crude to turn into gasoline and other fuels. Still, stocks at 377.5 million barrels are the highest since last July and are the most on record for this time of year since EIA data began in 1982.

The sharp increase in gasoline futures over the past month also contributed to this week's steep decline, according to market watchers. Indications of strong regional supplies just ahead of Thursday's expiration of the March gasoline-futures contract helped spurred the dramatic skid.

"We're seeing more pullback after huge advances," said Kyle Cooper, managing partner at IAF Advisors in Houston.

March heating-oil futures settled 4.38 cents, or 1.4%, lower at $2.9879 a gallon.

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