Oil futures edged lower Friday, but remained on track for weekly gains as traders weighed optimism over Chinese demand against rising U.S. crude inventories.
Price action
-
West Texas Intermediate crude for April delivery
CL.1,
-0.68% CLJ23,
-0.68%
fell 42 cents, or 0.5%, to $77.74 a barrel on the New York Mercantile Exchange, on track for a 1.9% weekly gain. -
May Brent crude
BRN00,
-0.74% BRNK23,
-0.74% ,
the global benchmark, was off 52 cents, or 0.6%, at $84.23 a barrel on ICE Futures Europe, headed for a 1.7% weekly advance. -
Back on Nymex, April gasoline
RBJ23,
-0.78%
fell 0.8% to $2.679 a gallon, while April heating oil
HOJ23,
-0.83%
declined 0.4% to $2.855 a gallon. -
April natural gas
NGJ23,
+2.64%
rose 2% to $2.819 per million British thermal units, on track for a 10.6% weekly advance.
Market drivers
Crude logged a third straight winning session Thursday “on overall market optimism over a Chinese economic recovery,” wrote analysts at ING, in a note. Upbeat survey-based data on economic activity in China released earlier this week helped set the tone.
Meanwhile, the price for spot and nearby Brent crude traded at a premium over later futures, a condition known as backwardation, that reflects increased near-term demand, they noted. The spread for the nearby contract over the next month
BRNM23,
hit a three-month high of 66 cents a barrel on Thursday.
At the same time, positive economic data out of the U.S. continues to stoke worries the Federal Reserve will be more aggressive than previously expected in its bid to bring down inflation, raising the threat of a deep economic downturn.
