Despite Jobs Data, Oil Falls Again

Published on Thursday, 02 February 2012 17:05 Written by Todd Shriber

New York, February 2^nd (TradersHuddle.com) –  Most of the recent economic from the U.S. and other major global economies has been decent lately and that was the case again today as initial claims for jobless benefits fell by 12,000 to 367,000 last week. Economists were expecting a reading of 371,000. That wasn’t enough to keep oil prices from another decline as NYMEX crude settled lower by $1.25 at $96.36 a barrel, extending a five-day losing streak and falling below $97 per barrel for the first time in six weeks.

Despite what have been positive economic data points from the U.S. and China, the world’s two largest oil consumers, oil demand in the U.S. is now resting at a 13-year low. U.S. oil use posted the biggest single-week drop in 14 years to set a 13-year average daily low of 17.653 million barrels a day, according to the Energy Information Administration.

Believe it or not, it was a strong day for natural gas futures with the United States Natural Gas Fund (NYSE: UNG) surging more than 7% on volume that was more than 2.5 times the daily average. Earlier today, U.S. Commodities Funds, UNG’s sponsor, announced it will commence a four-for-one reverse split of the ETF on February 21 and the split will go into effect the next day.

Looking at main troika of U.S. oil companies, Exxon Mobil (NYSE: XOM) was down about half a percent, while Chevron (NYSE: CVX) and ConocoPhillips (NYSE: COP) each added almost 0.9%.

While earnings season is all but over for the major U.S. integrateds, there are still some marquee reports to come, and Royal Dutch Shell (NYSE: RDS-A) was among them. Europe’s largest oil company stepped into the earnings confessional today and failed to impressive investors with U.S.-listed shares trading lower on the day. Shell said it plans to spend $32-$33 billion this year up from $31.5 billion last year and that it expects oil and gas production will reach 4 million barrels per day in 2017-2018, but investors appeared concerned that Shell is spending too much for results that some deem as only mediocre.

It was a mixed day for oil services names as well. Shares of Cameron International (NYSE: CAM) slumped almost 2% on volume that was more than twice the daily average after the company reported strong fourth-quarter results but announced a cautious tone for the current quarter. The company’s first-quarter forecast of 50-55 cents per share is well below the 75 cents Wall Street was expecting.

It was a different story with National Oilwell Varco (NYSE: NOV). That stock was up more than 3% on heavy turnover after reporting strong fourth-quarter results. NOV, the largest U.S. maker of oilfield equipment, may be weeks away from a pair of acquisitions valued between $250 million and $750 million, Bloomberg reported. That’s not surprising as NOV is the product of merger and is one of the most acquisitive oil services companies.