Oil falls below $76 a barrel
U.S. crude oil futures fell below $76 a barrel on Monday, after gaining more than 5 percent last week, as traders locked in profits ahead of earnings season and fresh U.S. economic data.
Earnings on the S&P 500 are expected to have grown 27 percent in the second quarter, but the outlook for U.S. consumer demand is less bright. U.S. retail sales data out on Wednesday is expected to show spending easing 0.2 percent in June.
Crude for August delivery fell 51 cents to $75.58 a barrel at 3:01 a.m. ET, after closing last week with a gain of more than 5 percent — its biggest jump since the week to May 28.
London Brent crude was trading 60 cents lower at $74.82 a barrel.
Oil rose earlier on Monday after China over the weekend reported a 43.9 percent surge in June exports from a year earlier, while crude imports in the world’s second-largest energy user rose by a quarter to hit a record high above 22 million metric tons.
“The profit was good enough for them in the last few days” as no new hurricanes were forming to push prices higher, said Benson Wang, Sydney-based trader at Commodity Broking Services.
“I’ll be very cautious about prices at these levels,” he said.
Weather forecasters reported no new signs of foul weather brewing that could hit the Gulf of Mexico, after Tropical Depression No.2 hit Mexico’s coast near the border with Texas on Thursday, missing energy production platforms.
INVESTORS CUT LONG POSITIONS
Investors were not as confident about the economic outlook in the second half as they have unwound long positions in the past couple of weeks, Wang said.
Net speculative long positions on NYMEX crude were cut by nearly 20,000 to 74,216 in the week to July 6, data from the Commodity Futures Trading Commission on Friday showed, the third week of falls.
For a graphic of NYMEX speculative crude positions, see: here
U.S. crude remains below a 19-month peak above $87 reached in early May, having rebounded sharply from a trough below $65 on May 20.
Stock markets in Asia rose, after the best week in a year for U.S. equities. The driver this week will be quarterly earnings, which kick off on Monday with the results of aluminum producer Alcoa.
U.S. June retail sales data out on Wednesday will be pivotal to gauge the country’s economic recovery, Stephen Schork, president of energy advisory firm the Schork Group, said in a note.
“If we are to see serious gains from the bulls this week, we will need to see strength in equities, strong retail sales figures and a weaker dollar would not hurt,” he said.
The yen eased on Monday after election results showed political uncertainty lay ahead for Japan after a poor showing for the ruling party in upper house elections.
Source: Reuters