Home Energy Oil Falls Sharply at Weeks End

Oil Falls Sharply at Weeks End


Brent Crude oil fell on Friday, following a two-day, $3 rally, as weak economic data from the United States sounded a note of caution on growth prospects in the world’s largest oil consumer. Oil and other commodities such as metals slid in a midday selloff that traders said may have been prompted by fund liquidations as European markets closed for the weekend. Later, Brent pared losses in the afternoon. “The markets tend to overreact. The oil market got knocked off its knees and grabbed some legs,” said Dan Flynn, an analyst and trader at Price Futures Group in Chicago.


Even after Brent’s biggest one-week gain since November 2012, it remains more than 6 percent below where it started April. A string of disappointing reports in recent weeks from the United States, China and Germany have stoked fears of global economic slowdown.


Traders said low trading volumes indicated a lack of conviction in this week’s rally. Volumes for U.S. crude were 22 percent lower than the 30-day moving average and 11 percent lower for Brent. On Friday, the Commerce Department reported U.S. gross domestic product expanded at a 2.5 percent annual rate in the first quarter, slower than the 3.0 percent rate expected. The data fed worries about a deceleration in the second quarter and U.S. equity markets fell for most of the session.

Brent slipped 25 cents a barrel to settle at $103.16 a barrel after touching a low of $102.25. U.S. crude settled down 64 cents at $93.00 after going to $92.06 at midday.

U.S. crude prices have skidded from over $97 at the beginning of April to below $86 by mid-month.

“The market rebounded pretty strongly in the past week. We bounced from $85 close to $94 and it looks as if what you’re seeing today is a little bit of profit-taking,” said Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut.