Oil prices dropped on New York and London markets in May 5 trading, and analysts said the energy markets lacked firm direction amid disappointing economic news from China and continuing conflict in Ukraine.
Clashes were reported in at least six eastern Ukraine cities during May 3-4 while Ukraine’s military works to reclaim control of certain territories from pro-Russian rebels.
Elsewhere, China’s final HSBC Manufacturing Purchasing Managers’ Index for April released May 5 rose only slightly to 48.1 compared with 48 in March. A reading below 50 indicates economic contraction, signaling slowing oil demand from China.
Barclays Capital Inc. analysts expect world oil fundamentals will firm in coming months, they said in a weekly energy outlook note.
“Along with summer demand and refineries returning from maintenance, the Brent July-August time spread is expected to be well supported given the 25-day maintenance announced for Buzzard,” Barclays noted of the UK North Sea oil field.
The June natural gas contract edged up 1.4¢ to a rounded $4.69/MMbtu.
Heating oil for June delivery decreased by a rounded 1.6¢ to a rounded $2.91/gal. Reformulated gasoline stock for oxygenate blending for June delivery decreased 3.5¢ to a rounded $2.91/gal.
In London, the June ICE contract for Brent crude delivery dropped 87¢, closing at $107.72/bbl. The July contract dropped 85¢ to settle at $107.12/bbl. The ICE gas oil contract for May was down $11.50 to $898/tonne.
The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $104.35/bbl on May 5, increasing 10¢ from May 2.
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