Crude pares losses as smoke clears from equities implosion
Pubdate：2018-02-07 11:24
Source：liyanping
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NEW YORK (Bloomberg) -- Oil pared some of its losses as a historic collapse in stock markets began to peter out.
Futures were down 0.4% in New York after earlier falling as much as 1.6%. Blue-chip stocks wiped out about two months of gains on Monday amid heightened anxiety about inflation and borrowing costs, undermining confidence in economic growth that drives energy demand. Trading screens that were bathed in red numbers as the day began showed more green by mid-morning in New York.
“Crude oil wants part of the action,” Bob Yawger, director of futures at Mizuho Securities USA Inc. in New York, said by telephone. “Risk assets have suddenly become in vogue, the exact opposite with an exclamation point of yesterday.”
Oil wasn’t immune from the broad selloff that gutted equity and debt markets on Monday. Even as the Organization of Petroleum Exporting Countries and its partners including Russia work to reduce output, American shale drillers remain a persistent threat. U.S. output jumped above 10 MMbpd in November and inventories stored in American tanks and terminals expanded for the first time in 11 weeks.
West Texas Intermediate for March delivery edged lower by 18 cents to $63.97/bbl at 10:45 a.m. on the New York Mercantile Exchange. Total volume traded was about 56% above the 100-day average.
Brent for April settlement slid 31 cents to $67.31 on the London-based ICE Futures Europe exchange. Earlier, the global benchmark fell below its 50-day moving average for the first time since July. The global benchmark crude traded at a premium of $3.62 to April WTI.
The Dow Jones Industrial Average index was little changed at 10:47 a.m. in New York after dipping more than 2% shortly after trading opened. ExxonMobil Corp. and Chevron Corp. were among the poorest Dow performers during Monday’s crash. In the S&P 500 energy index, Chevron was one of the nine stocks that posted gains on Monday; the other 23 companies all traded lower.
Traders are also focused on the change in crude inventories this week. In the U.S., stored supplies probably increased by 3 MMbpd last week, according to a Bloomberg survey ahead of government data scheduled to be released on Wednesday.
A stockpile estimate from the industry-funded American Petroleum Institute will be released later Tuesday.
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