Mixed Data Pressured Oil
Published on Thursday, 03 May 2012 18:52 Written by Todd Shriber
New York, May 3rd (TradersHuddle.com) – Ahead of Friday’s crucial April jobs report, oil futures found their way to the lowest levels in multiple weeks as traders struggled to find any good cheer in the key economic reports that were issued Thursday. NYMEX-crude for June delivery slid $2.68, or 2.6%, to settle at $102.54 a barrel. In London, Brent crude for June delivery plunged $2.12, or 1.8%, to finish the day at $116.08 a barrel. That’s the lowest closing price for the global benchmark contract since early February.
Traders’ move away from oil today sparked only a small rally in the U.S. dollar as the PowerShares DB US Dollar Index Bullish (NYSE: UUP) gained less than 0.1% on the day. In economic news, the Institute for Supply Management said its non-manufacturing index slid to 53.5 in April from 56 in March. Economists expected an April reading of 55.3.
Initial jobless claims fell by 27,000 to a seasonally adjusted 365,000 last week. Economists expected a reading of 378,000. The Labor Department delivers the April jobs report Friday before the open of U.S. markets. Economists are expecting the April NFP number to show the addition of 160,000 new jobs, but any significant miss of that number coupled with a large downward revision of the already disappointing March number would likely spark a massive sell-off in the oil pits and among oil equities. After all, the U.S. remains the world’s largest oil buyer.
Natural gas futures jumped 4% today with the help of a government report that said the U.S. isn’t running out of places to store the fuel. Production of natural gas has waned recently amid a supply glut that has killed prices. The United States Natural Gas (NYSE: UNG) jumped 3.4% on volume that was well above the daily average. Despite the good cheer for natural gas the First Trust ISE-Revere Natural Gas Index Fund (NYSE: FCG) lost almost 2% on volume that was also well above the daily average.
In earnings news, shares of Apache (NYSE: APA) fell almost 4% on strong volume after the company said its first-quarter profit fell 30% due to slumping gas prices. Apache earned $778 million, or $2 per share, compared with $1.12 billion, or $2.86 per share, a year earlier. On an adjusted basis, Apache posted EPS of $3, missing the $3.10 per share analysts expected.
Shares of Transocean (NYSE: RIG), the world’s largest provider of offshore drilling services, rose modestly after the company reported first-quarter revenue of $2.4 billion, which topped the consensus estimate of $2.33 billion. The stocks has jumped 33% this year, but lost more than 6% in the past month.