Oil below $67 amid mixed economic signals
VIENNA — Oil prices gave up early gains to slip back below $67 a barrel Tuesday as investors weighed mixed signals about the strength of the global economic recovery.
Benchmark crude for September delivery was down 41 cents to $66.30 a barrel in afternoon European trading on the New York Mercantile Exchange. On Monday, the contract fell 76 cents to settle at $66.75.
Crude prices are looking for direction. They dropped from above $71 a barrel Friday on concerns that recovery from recession may be slow because of weak U.S. consumer demand after rising earlier last week on data showing Germany, France and Japan had emerged from recession in the second quarter.
U.S. stocks were marginally in positive territory shortly after opening. The Dow Jones industrial average fell 2 percent Monday, but Asian and European indexes rebounded Tuesday.
Still, doubts linger about the pace of a global economic rebound.
“I think the market was too optimistic about the recovery,” said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore. “It’s not a strong rebound yet.”
With traders edgy about the direction of the economy — and crude demand — trader and analyst Stephen Schork suggested that prices would bounce within a “well defined range between the high $50s and low $70s in the near future.”
Investors also will be watching if the first hurricane of the year threatens oil installations in the Gulf of Mexico. Hurricane Bill was a Category 2 storm with winds of 100 mph (160 kph) and will likely be near Bermuda by the end of the week, the U.S. National Hurricane Center said.
“This year is supposed to be a quiet hurricane season, but it only takes one bad one to really drive the market up,” Chu said.
In other Nymex trading, gasoline for September delivery slipped by more than 3 cents to $1.92 a gallon and heating oil fell by almost 3 cents to fetch $1.80. Natural gas for September delivery rose was down by more than a cent, at $3.15 per 1,000 cubic feet.
In London, Brent prices lost 77 cents to sell for $69.77 a barrel on the ICE Futures exchange.
Associated Press writer Alex Kennedy contributed to this report from Singapore
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