Oil futures slumped on Thursday, the first trading day of the new year, with gains in the U.S. dollar and increased production in Libya helping to push down prices 3%.
February crude oil fell $2.98, or 3%, to settle at $95.44 a barrel on the New York Mercantile Exchange. That was the steepest one-day drop since Nov. 6, 2012.
Darin Newsom, senior analyst at DTN, attributed the slide to the dollar looking “pretty stout.”
“It’s putting a little bit of pressure on commodities in general,” he told MarketWatch. A stronger dollar tends to weigh on dollar-denominated commodity prices.
On a longer-term basis, there is general bearishness around oil as supplies remain plentiful and demand hasn’t returned to pre-financial crisis levels, Newsom said.
Other analysts tied Thursday’s slide to greater output by Libya, along with softer Chinese manufacturing data and light, holiday-week trading volumes. Fawad Razaqzada, technical analyst at Forex.com, said in a note that crude was hit by “a triple whammy of slowing manufacturing expansion in China, news of an imminent increase in Libyan oil production and light trading volumes.”
Traders also mulled Thursday’s U.S. economic data for hints on the outlook for energy demand, as well as looked ahead to a supply report expected Friday.
Weekly jobless claims fell to their lowest level in four weeks, while the closely followedISM indexshowed U.S. manufacturing companies expanded. at a slightly slower, but still-healthy pace in December compared with a month earlier.
Source: Marketwatch
