Oil fell from a nine-week high in New York, paring a second weekly advance, on speculation gains may have been excessive amid worse-than-expected economic data and signs seasonal crude demand is weakening.
Futures slipped as much as 0.8 per cent, snapping a seven- day run of gains that was the longest since February. Oil may fall next week on signs of slowing economic growth, according to a Bloomberg News survey. Existing US home sales unexpectedly dropped in June and manufacturing in the Philadelphia region contracted a third month in July, reports showed yesterday. OPEC will cut shipments this month as the seasonal demand for driving fuel fades, according to Oil Movements, a tanker tracker.
"The negatives are the economy," Jonathan Barratt, the chief executive officer of Barratt's Bulletin, a commodity- markets newsletter in Sydney, said in a telephone interview. "We've had seven days of gains, the market is long, the window closes very quickly with this sentiment."
Crude for August delivery, which expires today, slid as much as 72 cents to $US91.94 a barrel in electronic trading on the New York Mercantile Exchange and was at $US92.24 at 2:28 p.m. Sydney time. It climbed 3.1 per cent yesterday to $US92.66, the highest close since May 16. The more-actively traded September future decreased 41 cents to $US92.56. Front-month prices are 5.9 per cent higher this week and down 6.7 per cent this year.
Brent crude for September settlement was at $US107.37 a barrel, down 43 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium to West Texas Intermediate of $US14.81, from $US14.83 yesterday.
Oil in New York may drop toward $US80 a barrel as prices fail to break through the top of a so-called Ichimoku cloud, according to technical analysis by Barclays Plc. WTI futures may be capped at $US93.75, the upper boundary of the cloud which is calculated by analyzing the midpoints of historical highs and lows and is used to show where buy orders may be clustered.
Fourteen of 32 analysts surveyed by Bloomberg News forecast crude will drop through July 27. Twelve respondents, or 38 per cent, predicted that futures will rise and six said there will be little change in prices.
US home purchases slid 5.4 per cent in June to a 4.37 million annual rate, an eight-month low, figures from the National Association of Realtors showed in Washington. The Federal Reserve Bank of Philadelphia's general economic index was minus 12.9 in July after minus 16.6 the month before. Readings of less than zero signal contraction.
The Organization of Petroleum Exporting Countries, responsible for about 40 per cent of global supplies, will curb exports by 0.9 per cent to 23.78 million barrels a day in the four weeks to Aug. 4, compared with 24 million a month earlier, Oil Movements said yesterday in an e-mailed report. The data exclude Angola and Ecuador. Western sanctions on Iranian shipments will also contribute to the drop, the researcher said.
Oil surged yesterday on concern increased tension in the Middle East will threaten crude supplies. Israeli Prime Minister Benjamin Netanyahu blamed Lebanon's Iranian-backed Hezbollah organization for a bus bombing in Bulgaria that killed Israeli tourists and threatened a forceful response. In Damascus, Syrian government forces battled rebels in retaliation for a blast that killed three top anti-insurgency leaders.