Oil prices drifted around the unchanged mark Friday, a recovery from a Thursday drubbing that created the lowest finish in weeks, triggered by an increase for U.S. refined product inventories.
October West Texas Intermediate crude CLV8, +0.13% the U.S. oil benchmark, tacked on 22 cents, or 0.3%, to $67.95 a barrel. It settled Thursday at $67.77 a barrel on the New York Mercantile Exchange. CLV8, +0.13% That was the lowest finish for the contract since Aug. 21, according to FactSet data. The contract is headed for a 2.7% weekly loss.
November Brent LCOX8, +0.39% the global benchmark, rose 35 cents, or 0.4%, to $76.85 a barrel, following a loss of 1.2% in the previous session on the ICE Futures Europe exchange.
“Crude prices have been limited by a rise in refined product stocks and a relatively weak U.S driving season. Also not helping is the ongoing [emerging-market] weakness,” said Dean Popplewell, analyst with Oanda. “Investors can expect potential new U.S. import tariffs on Chinese goods to continue to weigh on oil market sentiment.”
The Energy Information Administration reported Thursday that domestic crude supplies fell by 4.3 million barrels for the week ended Aug. 31. That was larger than the 2.5 million-barrel fall expected by analysts polled by S&P Global Platts, and the decrease of 1.2 million barrels reported by the American Petroleum Institute Wednesday. Supply data were released a day later than usual due to Monday’s Labor Day holiday.
Gasoline stockpiles rose 1.8 million barrels for the week, while distillate stockpiles added 3.1 million barrels, according to the EIA. The S&P Global Platts survey forecast a supply decline of 1.5 million barrels for gasoline, but distillates were expected to be unchanged.
Among products, October gasoline RBV8, +0.49% shed 0.7% to settle at $1.951 a gallon, while October heating oil HOV8, +0.19% lost 1.1% to $2.209 a gallon.
“The stock build in refined products appears to have been a bigger driver in price” than the crude inventory decline, according to Warren Patterson, commodities strategist at ING Bank. “In fact, U.S. gasoline inventories stand at least at a five-year high.”
U.S. jobs data could speak to the continuation of energy demand. The August jobs figures set for release at 8:30 a.m. Eastern are expected to show the U.S. economy added 200,000 new jobs, according to economists polled by MarketWatch, after a gain of 157,000 in July. The unemployment rate is forecast to dip back down to 3.8% from 3.9%; a fall to 3.7% would mark the lowest reading since 1969.
Hourly pay for the average U.S. worker is up 2.7% over the past 12 months and economists predict little change in August. Analysts said evidence of wage pressures is likely to remain elusive.
The energy market is looking ahead to weekly data Friday from Baker Hughes on the number of rigs drilling for oil in the U.S., as well as monthly oil market reports from OPEC and the International Energy Agency due out next week.
Impending U.S. sanctions on Iran’s oil industry, set to take effect in November, are expected to potentially disrupt around one million barrels a day of the country’s roughly 2.5 million barrels a day in crude experts, tightening the market and bolstering prices.
—Christopher Alessi contributed to this report
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