Americas News
Encouraging Jobless Claims Fail To Please Traders, Crude Prices Dip Again
Crude on Thursday incurred another round of losses, as traders chose to interpret good news as bad with regards to the U.S. Labor Department reporting the number of Americans filing new claims for unemployment.
That figure was 881,000 for the latest week, down from a revised 1.011 million the week prior, and while it also represented a remarkable comeback from the millions of claims filed during the government-imposed coronavirus lockdowns, traders worried it was a sign that economic recovery wasn't as robust as many experts think.
Ignored completely was continuing claims falling to 13.2 million in the week, down from a revised 14.4 the week prior.
Consequently, Brent fell a modest 30 cents to $44.13 per barrel, and West Texas Intermediate settled 14 cents lower at $41.37 per barrel.
Phil Flynn, senior market analyst at Price Futures Group Inc., who in the previous session chided traders for what he considered to be an unjustified sell-off in the face of so much positive economic and Covid vaccine news, said of Thursday's performance, "The market failed to react positively to the drawdown in inventories and then threw in the towel for the Labour Day weekend."
Stoking traders fears, analysts warned that upcoming refinery maintenance and the end of the summer driving season could also limit crude demand.
Meanwhile, John Kemp, commodities analyst at Reuters, worried that "Members of the Organization of the Petroleum Exporting Countries (OPEC).....are showing signs of weakening commitment to output cuts agreed in April.
"At the same time, consumption is not recovering as fast as anticipated three months ago, as the coronavirus epidemic continues and major economies are hit by job losses."
Vandana Hari, founder of Vanda Insights, offered her opinion about the state of the crude market: "As far as fundamentals are concerned, there is really not much to move oil around either way, which is why we have seen it pretty range bound, but within that continuing to grind higher because of a weaker dollar."
She added that the greenback is likely to remain under pressure through 2021 because it would be in the interest of the U.S. economy to keep the dollar lower.
As for vaccine news that has helped support crude trader sentiment of late, the Centers for Disease Control and Prevention on Wednesday told health authorities in the U.S. to be prepared for vaccine dissemination by November 1; also, Pfizer's CEO on Thursday said his company could have results from its late-stage coronavirus vaccine trial as early as October.
