(1888PressRelease)
May 15, 2009 - Oil prices hovered near $58 a barrel Thursday in Asia as weak U.S. retail sales and housing figures dampened investor optimism about a fledgling economic turnaround.
Benchmark crude for June delivery was down 35 cents to $57.67 a barrel midday in Singapore, in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract fell 83 cents to settle at $58.02.
Prices have jumped from near $50 a barrel earlier this month, and rose above $60 earlier this week, on hopes that the worst of the recession is over the U.S. economy, the world's biggest oil consumer.
But figures showed that U.S. retail sales unexpectedly fell in April, and department story Macy's Inc. said its loss in the first-quarter widened from a year ago. The American housing market also continues to struggle. RealtyTrac data said Wednesday that April's foreclosures were up 32 percent from a year ago, and up slightly from March.
Higher crude prices are raising gasoline up as well, which could help snuff out any nascent recovery in demand.
"We shouldn't expect the U.S. consumer to be as strong as they've been over the last few years," said Stephen Yang, an analyst with Seedorf Luxman & Partners in Singapore.
Crude inventories fell for the first time in about three months, down 4.7 million barrels in the week ended May 8, the Energy Department's Energy Information Administration said Wednesday. Analysts had expected a build of 1.4 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
“Oil will likely trade sideways for the next few months before a global economic recovery at the end of the year boosts demand and prices,” the Seedorf Luxman &Partners analyst said..
"You have these two opposing forces," Yang said. "On the one hand, fundamentals and the massive inventories that need to be drawn down weighing on prices, and on the other, market speculation coming back to equity and commodities, looking for a turning point."
In other Nymex trading, gasoline for June delivery fell 0.63 cent to $1.68 a gallon and heating oil was steady at $1.49 a gallon. Natural gas for June delivery dropped 10 cents to $4.23 per 1,000 cubic feet.
In London, Brent prices fell 33 cents to $1.00 to $57.01 a barrel on the ICE Futures exchange.
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