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Crude falls as supply concerns eclipse geopolitical issues

CommoditiesSep 12, 2014 02:48PM ET
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Oil falls on global supply glut fears, firming dollar - Oil prices traded near session lows on Friday due to ongoing concerns that global supply is plentiful while global demand remains soft, which offset concerns that conflicts in Ukraine and the Middle East may disrupt supply.

In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in October traded down 0.81% at $92.08 a barrel during U.S. trading. New York-traded oil futures hit a session low of $92.06 a barrel and a high of $93.67 a barrel.

The October contract settled up 1.27% at $92.83 a barrel on Thursday.

Nymex oil futures were likely to find support at $90.43 a barrel, Thursday's low, and resistance at $95.91 a barrel, the high from Sept. 2.

Oil prices fell on concerns that while the U.S. and other major economies are improving, the global economy still battles headwinds at a time when energy markets are awash in crude.

Military conflicts in Ukraine and in the Middle East have rattled nerves in recent weeks, though oil shipments have gone on without disruptions, which sent investors selling anew on Friday to wind down positions carrying geopolitical risk premiums.

Investors ignored upbeat U.S. data, mainly due to a firming dollar.

A stronger greenback makes oil less attractive commodity in dollar-denominated exchanges, especially in the eyes of investors holding other currencies.

The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to a 14-month high of 84.6 this month from 82.5 in August. Analysts had expected the index to rise to 83.3 in September.

The report came after official data showed that U.S. retail sales rose 0.6% last month, in line with expectations. Retail sales for July were revised to a 0.3% gain from a previously estimated flat reading.

Core retail sales, which exclude automobiles, increased by 0.3% in August, also in line with market expectations and growing at the fastest pace since April. July's figure was revised to a 0.3% gain from a previously estimated 0.1% rise.

Separately, on the ICE Futures Exchange in London, Brent oil futures for October delivery were down 1.14% at US$96.97 a barrel, while the spread between Brent and U.S. crude contracts stood at US$4.89 a barrel.

Crude falls as supply concerns eclipse geopolitical issues

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