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Tuesday, May 31, 2011...

•   July crude oil prices this morning are trading up +$1.61 barrel and July gasoline is +2.17 cents per gallon, both at 2-week highs. Crude oil and gasoline prices last Friday finished higher as a weak dollar and a statement from the G-8 saying the global economy is strengthening offset weaker-than-expected US economic data: CLN11 +$0.36, RBN11 +2.39. Jul gasoline rallied to a 2-week high.

                Bullish factors included (1) the fall in the dollar index to a 2-week low, which boosts investment demand in commodities, (2) the statement from the G-8 leaders meeting in France that the global economy is strengthening, which may lift global energy demand, and (3) strength in gasoline after a power blackout shut 3 refineries in Texas City, Texas.

                Bearish factors included (1) the weaker-than-expected Apr US personal spending and Apr pending home sales, which signals economic weakness that may lead to reduced fuel demand, and (2) the prediction from JPMorgan Chase that OPEC will raise oil-output quotas next month as the group seeks to "assuage" pressure on consumer nations to release emergency stockpiles.

Wednesday, June 1, 2011...

•   July crude oil prices this morning are trading down -19 cents a barrel and July gasoline is -1.12 cents per gallon. Crude oil and gasoline prices yesterday rallied to 2-week highs and finished sharply higher as the dollar slumped and after TransCanada shut its 591,000 bpd crude pipeline to the US after a leak: CLN11 +$2.11, RBN11 +1.90.

                Bullish factors included (1) the slide in the dollar index to a 2-1/2 week low, which boosts investment demand in commodities, (2) the action by TransCanada to shut its 591,000 bpd Keystone crude pipeline that sends Canadian oil to the US after "an issue with a fitting" caused a leak, and (3) comments from Qatar's oil minister who said there's "no noticeable urgency" for OPEC to raise its oil quotas when it meets next week.

                Bearish factors included (1) the weaker-than-expected US economic data on May Chicago purchasing managers, May US consumer confidence and Mar S&P/CaseShiller composite-20 home prices, which i ndicates economic weakness that is negative for energy demand and consumption, and (2) weaker-than-expected European economic data on Apr French consumer spending and Apr German retail sales, which may limit economic expansion and fuel demand.

Thursday, June 2, 2011...

•   July crude oil prices this morning are trading up +8 cents a barrel and July gasoline is +0.96 of a cent per gallon. Crude oil and gasoline prices yesterday closed sharply lower as OPEC increased production in May and after weaker-than-expected global economic data hint at reduced energy demand: CLN11 -$2.41, RBN11 -6.45.

                Bearish factors included (1) weaker-than-expected US economic data that showed the smallest gain in May ADP employment in 8 months and May ISM manufacturing activity expanded at its lowest level in 20-months, (2) the unexpected downward revision to May Euro-Zone PMI manufacturing to a 7-month low, (3) the fall in May China PMI manufacturing activity to a 9-month low, and (4) Bloomberg data that shows OPEC crude production in May rose +0.6% to 28.895 million barrels a day, the highest since Feb.

                Bullish factors included (1) the fall in the dollar index to a 3-1/2 week low, which boosts investment demand in commodities, and (2) the statement from Iran' s OPEC Governor who said that maintaining current OPEC production quotas is the only way to balance the oil market. Expectations for the weekly DOE inventory report (delayed 1 day because of the Memorial Day holiday) are for crude oil supplies to drop -1.6 million bbl, gasoline stockpiles to increase +800,000 bbl, distillate inventories to remain unchanged and the refinery capacity rate to rise +0.5 to 86.8%.

Friday, June 3, 2011...

•   July crude oil prices this morning are trading down -87 cents a barrel and July gasoline -1.50 cents per gallon. Crude oil and gasoline prices yesterday fell to 1-week lows and finished mixed as an increase in fuel demand and a weak dollar offset weaker-than-expected economic data and an unexpected increase in weekly crude inventories: CLN11 +$0.11, RBN11 -0.73.

                Bearish factors included (1) weaker-than-expected US economic data that showed a smaller-than-expected decline in weekly US jobless claims along with the biggest monthly decline in Apr factory orders in 11 months, which suggests economic weakness that may curtail energy demand, (2) the unexpected increase in weekly DOE crude oil inventories for a second week (+2.88 million bbl versus expectations of -1.6 million bbl), and (3) the larger-than-expected rise in weekly DOE gasoline supplies (+2.55 million bbl versus expectations of +800,000 bbl).

                Bullish factors included (1) the drop in the dollar index to a 3-1/2 week low, which boosts investment demand in commodities, and (2) increased demand after US gasoline demand in the week ended May 27 rose +4.5% w/w to 9.43 million barrels a day, the highest in 9 months.

Monday, June 6, 2011...

•   July crude oil prices this morning are trading down -96 cents barrel and July gasoline -2.01 cents per gallon. Crude oil and gasoline prices last Friday slipped to 1-week lows and settled mixed as the weaker-than-expected US May payrolls report bolstered concern that a slower economic recovery will curb oil demand while a weaker dollar boosted gasoline: CLN11 -$0.18, RBN11 +2.54.

                Bearish factors included (1) the smaller-than-expected increase in May US nonfarm payrolls along with the unexpected increase in the May US unemployment rate, which suggests an economic slowdown that would be negative for energy demand, and (2) comments from Saudi Arabian Oil Minister Ali Al-Naimi who said that his country has 3 million to 3.5 million barrels a day of spare capacity and that OPEC "will respond" at its Jun 8 meeting if there is demand for more oil production.

                Bullish factors included (1) the decline in the dollar index to a 1-month low, which boosts investment demand in commodities, and (2) the stronger-than-expected May ISM non-manufacturing index, which signals economic expansion and is positive for energy demand and consumption.

Oil drops below $100 ahead of OPEC meeting
Oil settles under $100 per barrel, as investors await OPEC meeting and government reports

Monday June 6, 2011, 3:58 pm
NEW YORK (AP) -- Oil fell below $100 a barrel Monday as investors and economists await a key OPEC meeting this week and the government's outlook on U.S. supply and demand.

Benchmark West Texas Intermediate for July delivery lost $1.21 to settle at $99.01 per barrel on the New York Mercantile Exchange. Crude has been within a few dollars of the $100 mark for about a month.

A stronger dollar pushed oil lower Monday. Oil is priced in dollars and becomes more expensive for buyers with foreign currency as the dollar gets stronger.

TransCanada Corp. also said its Keystone Pipeline was back online after a minor oil spill at a pump station in Kansas. The pipeline delivers a half million barrels of oil per day to the U.S. from Alberta, feeding supplies to the delivery point for benchmark oil in Cushing, Okla. The 1,300-mile (2,080-kilometer) pipeline was taken offline twice in the last month as TransCanada dealt with leaks.

Analysts are looking for clues on what OPEC will do about oil production when the cartel meets Wednesday in Vienna. OPEC ministers could decide to try to push oil prices lower by increasing production. OPEC officials have said that they believe oil prices are too high and threaten global economic recovery.

"You have a lot of money sitting on the sidelines right now ahead of that meeting," analyst Stephen Schork said.

It's unclear how prices would react to more OPEC production. By pumping more oil, OPEC could make up for the loss of exports from Libya that were cut off by unrest that began there in February. That may push prices lower. But experts also point out that boosting production now could make it harder for the cartel to provide more crude later as global demand increases. That could force prices higher in the long run.

"It all depends on if you're taking a short-term or long-term view of things," independent oil analyst Jim Ritterbusch said.

Major oil investors like Goldman Sachs predict that oil prices will rise in the next 18 months as OPEC closes in on its maximum production capacity. The investment bank, which is considered a major player in oil markets, said in a research note Monday that global oil demand "continues to increase at a fast pace" with consumption rising by about 500,000 barrels per day in April.

Goldman analyst Michele della Vigna noted, however, that global demand growth appeared to slowing, particularly in Japan, where it fell by 357,000 barrels per day in April due to the earthquake and tsunami that hit the country in March. A number of manufacturing plants closed because of the damage.

Della Vigna also said there were signs of slumping demand closer to home. "May is the first month we have seen a possible reaction to demand from oil prices in the U.S."

The Energy Department will release its monthly short-term energy outlook on Tuesday and weekly petroleum inventories report on Wednesday. The recent trend has been for rising supplies and falling demand.

In other Nymex trading in July contracts, heating oil lost 3.93 cents to settle at $3.0174 per gallon and gasoline futures gave up 4.32 cents to settle at $2.9499 per gallon. Natural gas added 12 cents to settle at $4.827 per 1,000 cubic feet.

In London, Brent crude lost $1.36 to settle at $114.48 per barrel on the ICE Futures exchange.

Saudis raise oil production to curb prices...
June 6 2011 19:38

Saudi Arabia has been quietly increasing its crude oil production ahead of Wednesday's meeting of the Opec oil cartel, in a sign that Riyadh is trying to bring oil prices down to more comfortable levels for consumers in the US, Europe and China.

The kingdom boosted production in May by about 200,000 barrels a day and it is on course to increase it by another 200,000-300,000 b/d this month, taking its output above the critical 9m b/d level for the first time since mid-2008.

The rise comes as the seasonal refining maintenance seasons ends, increasing global demand for oil.

Riyadh acted unilaterally earlier this year when it moved to replace some of the production lost due to the civil war in Libya, where oil output has plummeted to 250,000 b/d, down from a pre-crisis level of around 1.6m b/d.

Bill Farren-Price, of consultants Petroleum Policy Intelligence, said Saudi output was "rising sharply" this month due to increased demand from Asian and, to a lesser extent, US refiner

Another industry official, familiar with Saudi production levels, confirmed that Riyadh was increasing its production in June.

"The Saudis are ramping up their production," said the official on condition of anonymity. "In part they need to for domestic needs as power demand increases with the arrival of the summer, but also the end of the refiners' maintenance means more demand."

Saudi oil output hit a five-year low of 8m b/d in February 2009 as Opec cut production during the global financial crisis to arrest a steep drop in oil prices.

News of the increase in Saudi output came as Opec ministers started to arrive in Vienna for what analysts said was the most politically charged meeting of the cartel in a decade.

The group, which controls about 40 per cent of global crude oil supplies, will consider on Wednesday the first increase in its production quotas – or the official output levels – in almost four years amid political tension in the Middle East.

Libya's representation at the Opec meeting was in doubt barely 48 hours before proceedings were due to begin. However, Tripoli decided on Monday to send Omran Abukraa, a former head of the national electricity authority, as head of the country's delegation, said a person familiar with the situation.

Mr Abukraa is loyal to Colonel Muammer Gaddafi's regime and his arrival will ensure that Libya's rebel movement has no opportunity to occupy the country's place at the Opec table. Shokri Ghanem, the Libyan oil minister, defected to the insurgents last month.

Two members of Opec – Qatar and the United Arab Emirates – have openly backed the rebels.

When Mr Abukraa takes Libya's place on Wednesday, he will be sitting alongside representatives of countries which are helping his opponents.

The political tension is likely to complicate what is already a difficult meeting. While Saudi Arabia and other Gulf neighbours such as Kuwait back a production rise, Opec price hawks such as Iran and Venezuela are resisting a large hike.

Oil prices retreated on Monday as traders and investors braced for an increase in the cartel's production. In London, Brent crude, the global benchmark, fell $1.57 to $114.25 a barrel. But oil prices are still within a trading range of between $105 and $125 a barrel, which has been in place over the last four months. In New York, West Texas Intermediate fell $1.32 to $98.91 a barrel.

Tuesday, June 7, 2011...

•   July crude oil prices this morning are trading down -36 cents a barrel and July gasoline -0.23 of a cent per gallon. Crude prices were undercut in overnight trade after an OPEC delegate said the cartel will raise production quotas. Crude oil and gasoline prices yesterday weakened and closed lower on speculation the global economic recovery and fuel demand are starting to falter: CLN11 -$1.21, RBN11 -4.32.

                Bearish factors included (1) the larger-than-expected drop in Jun Euro-Zone Sentix investor confidence to an 11-month low, which may portend a slowdown in European economic growth and energy demand, and (2) overall commodity weakness on concern s global economic slowdown will lead to reduced demand for commodities, including crude.

                Bullish factors included (1) the early drop in the dollar index to a 1-month low, which boosted investment demand in commodities, and (2) the statement from Venezuela's Oil Minister who said OPEC is unlikely to raise output quotas at this week's cartel meeting and that "We believe at the moment we're in balance."

Wednesday, June 8, 2011...

•   July crude oil prices this morning are trading down -94 cents a barrel and July gasoline -2.38 cents per gallon. Crude oil and gasoline prices yesterday slumped after an OPEC delegate said the cartel will raise production quotas, but recovered their losses and finished higher due to a weak dollar and strength in gasoline after Valero Energy's 310,000 bpd refinery in Port Arthur, Texas had a power disruption that curbed production: CLN11 +$0.08, RBN11 +4.20. Jul crude fell to a 2-week low but recovered its losses and closed higher.

                Bullish factors included (1) the slump in the dollar index to a 1-month low, which boosts investment demand in commodities, (2) strength in gasoline prices due to a disruption in production at Valero Energy's 310,000 bpd refinery in Port Arthur, Texas because of a power disruption, and (3) stronger than expected European economic data on Apr Euro-Zone retail sales and Apr German factory orders, which signals economic strength and is benefici al for energy demand and consumption.

                Bearish factors included (1) the statement from a Gulf delegate that OPEC will increase output targets to help replace missing supplies from Libya and meet demand growth later this year, (2) the prediction from Societe Generale SA and Morgan Stanley that OPEC is likely to raise output quotas by 1.5 million barrels a day, and (3) the outlook for increased gasoline supplies when the DOE reports weekly inventories on Wed. Expectations for Wednesday's weekly inventory report from the DOE are for crude oil supplies to fall -1.38 million bbl, gasoline stockpiles to increase +1.05 million bbl, distillate inventories to gain +125,000 bbl and the refinery capacity rate to remain unchanged at 86%.

Crude oil supplies rise by 2.3 million barrels
Energy Dept. says crude oil and gasoline supplies rose last week

Wednesday July 27, 2011, 10:47 am

NEW YORK (AP) -- The nation's crude oil and gasoline supplies grew last week, according to government data released Wednesday.

Crude supplies increased by 2.3 million barrels, or 0.7 percent, to 354 million barrels, which is 1.9 percent below year-ago levels, the Energy Department's Energy Information Administration said in its weekly report.

Analysts expected a drop of 2.3 million barrels for the week ended July 22, according to Platts, the energy information arm of McGraw-Hill Cos.

Gasoline supplies rose by 1 million barrels, or 0.5 percent, to 213.5 million barrels. That was more than analysts expected and 3.9 percent below year-ago levels.

Demand for gasoline over the four weeks ended July 22 was 3.3 percent lower than a year ago, averaging nearly 9.1 million barrels a day.

U.S. refineries ran at 88.3 percent of total capacity on average, a drop of 2 percentage point from the prior week. Analysts expected capacity to rise to 90.5 percent.

Supplies of distillate fuel, which include diesel and heating oil, rose by 3.4 million barrels to 151.8 million barrels. Analysts expected distillate stocks to increase by 1.8 million barrels.

Crude prices fell $2.10, or 2.1 percent, to $97.49 per barrel in morning trading on the New York Mercantile Exchange.

Oil prices fall as nation's stockpiles build
Oil prices fall after government says crude, gasoline supplies and pump prices rise

On Wednesday July 27, 2011, 11:00 am

Oil prices are falling after the government said the nation's oil and gasoline supplies rose last week.

Benchmark West Texas Intermediate crude for September delivery lost $1.50 to $98.09 per barrel Wednesday morning on the New York Mercantile Exchange. In London, Brent crude fell 59.8 cents to $117.69 per barrel on the ICE Futures exchange.

The Energy Department says oil inventories rose 2.3 million barrels to 354 million barrels last week. Gasoline supplies increased by 1 million barrels to 213.5 million barrels. Gasoline demand over the last four weeks remains below year-ago levels.

Gasoline pump prices rose about half a cent on Wednesday to a national average of $3.698 a gallon. That's nearly $1 more than a year ago.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Oil prices fell below $99 a barrel Wednesday in Europe after a report showed U.S. crude supplies unexpectedly jumped last week, suggesting demand may be weakening.

By early afternoon in Europe, benchmark oil for September delivery was down 73 cents to $98.86 a barrel in electronic trading on the New York Mercantile Exchange. Crude rose 39 cents to settle at $99.59 on Tuesday.

In London, Brent crude fell 60 cents to $117.68 per barrel on the ICE Futures exchange.

The American Petroleum Institute said late Tuesday that crude inventories rose 4.0 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a drop of 2.3 million barrels.

Inventories of gasoline dropped 600,000 barrels last week while distillates rose 2.9 million barrels, the API said.

The Energy Department's Energy Information Administration reports its weekly supply data -- the market benchmark -- later Wednesday.

Investors are also closely watching negotiations among U.S. leaders to raise the government's debt limit and Europe's bid to contain its own debt crisis.

"There is no doubt that U.S. recovery to date has been extremely fragile," said Richard Soultanian of NUS Consulting. "The uncertainty created by each of these challenges, at best, could derail the nascent economic recovery and, at worst, plunge us back into recession."

During the past days, the dollar has been weakening on back of a potential U.S. default. That has helped boost oil prices by making crude cheaper for investors holding other currencies.

On Wednesday, however, the euro slipped to $1.4475 from $1.4518 on Tuesday.

"Oil is no longer gaining anything from the U.S. dollar's continuing slide," said analysts at Commerzbank in Frankfurt. "These prices reflect concerns that the conflict over how to handle the U.S. debt limit and the threat of a de facto bankruptcy could hit demand in the world's biggest oil consuming country."

In other Nymex trading in September contracts, heating oil fell 1.51 cents to $3.11 a gallon while gasoline lost 0.67 cent to $3.0918 a gallon. Natural gas futures rose 3.1 cents to $4.362 per 1,000 cubic feet.

Oil settles below $98...

Wednesday July 27, 2011, 3:11 pm EDT
Oil prices fell Wednesday after the nation's oil and gasoline supplies rose last week with the release of millions of barrels from the Strategic Petroleum Reserve. Here's how energy contracts traded.

On the New York Mercantile Exchange:

Crude fell $2.19 to settle at $97.40 per barrel.

Gasoline lost 1.54 cents to settle at $3.0831 a gallon.

Heating oil gave up 3.07 cents to settle at $3.0944 a gallon.

Natural gas fell 1.3 cents to settle at $4.318 per 1,000 cubic feet.

On the ICE Futures exchange:

Brent crude dropped $1.24 to settle at $72.38 per barrel.

Aug. 9, 2011, 12:11 p.m. EDT

Oil rebounds from lows below $76 a barrel
OPEC cuts world oil demand forecast for 2011 and 2012

SAN FRANCISCO (MarketWatch) — Crude-oil prices traded modestly higher Tuesday, off session lows following tumultuous trading in Asian hours and the previous session's selloff in New York.

Oil for September delivery -3.55%  added 83 cents, or 1.1%, to $82.20 a barrel. It traded as low as $75.71 a barrel and as high as $83.05 a barrel earlier.

Oil plunged 6.4% plunge on Monday, after markets reacted to Standard & Poor's downgrade of U.S. debt late Friday and fears of a recession dominated.


To make matters harder for oil investors, the Organization of the Petroleum Exporting Countries cut its forecast for oil demand this year and in 2012.

In its monthly report released Tuesday, the cartel cited "economic worries along with high oil prices" as having affected demand in developed countries, leading to weaker-than-expected consumption during the summer driving season.

OPEC forecast world oil demand to grow 1.2 million barrels a day in 2011, 150,000 barrels less than in the previous report. And its 2012 forecast of growth world oil demand stands at 1.3 million barrels a day, after "a slight downward revision" from the previous forecast.

Brent crude oil, Europe's benchmark, also recovered some ground to add 94 cents, or 0.9%, to $104.63 a barrel on ICE Futures in London.

The September contract had dipped below $100 a barrel to trade as low as $99.61 a barrel earlier.

After Monday's mayhem, some analysts said the selloff was overdone. Also, speculation was rife that the Federal Reserve might hint at another monetary-easing program for the U.S. economy after its rate-setting policy meeting later Tuesday. Read more on what to expect at Fed meeting.

"We think the markets are getting quite oversold and likely overshooting the mark in terms of the news that triggered the selloff in the first place," said analysts at MF Global, referring to Standard & Poor's downgrade of the U.S. credit rating late Friday.

Some sense of relief after the selloff was also carrying the day for other energy products. September gasoline /quotes/zigman/2075611 RB1U -1.42%  added 3 cents, or 1.1%, to $3.72 a gallon. September natural gas /quotes/zigman/2049443 NG11U +1.93%  added 8 cents, or 2.1%, to $4.02 per million British thermal units.

Some bargain-hunting emerged in natural-gas futures, said Tim Evans, an analyst with Citigroup's Citi Futures Perspective.

Prices settled under the $4 mark on Monday, but natural gas "needs ongoing intense heat and some hurricane activity in the Gulf of Mexico in order to offset strong shale gas production rates," Evans said.

Oil Prices Rebound on Inventory Data...
08/10/11 - 10:38 AM EDT

NEW YORK (TheStreet) -- Oil prices sprung back to positive territory Wednesday morning, after a deep plunge below $80 the day before, as energy traders responded enthusiastically to an unexpected draw in weekly crude oil stocks and the Federal Reserve's latest update on reviving the economy.

West Texas Intermediate light sweet crude oil for September delivery was rising $1.32 to $80.62 a barrel, while the September Brent crude oil contract was popping $2.11 to $104.68.

The Federal Reserve said on Tuesday that it would keep the benchmark interest rate at near-zero levels until mid-2013 in its latest bid to sustain the economic recovery.
"That did not seem like enough at first ... and the DJIA sold off 150 points in the aftermath of the comments," Cameron Hanover analysts noted. "But, that was hardly the full story on Tuesday. It took traders an hour to parse the Fed's comments and, as traders mulled it over, they became more bullish over the Fed's comments."


"Ten-year bonds reacted in such a way that traders thought the Fed had achieved QE3 without buying a single bond."
The Federal Reserve news overlapped with the Internal Energy Agency's decision to trim its global oil demand forecast for 2011 on concerns of higher prices and slowing economic growth.
However, the agency raised its estimate for oil demand growth in 2012 "due to oil-fired power needs in Japan."
Meanwhile, the American Petroleum Institute said late Tuesday that there was a large, 5.2 million barrel decline in crude oil inventories in the week ended Aug. 5. Analysts were generally expecting a build of 1.8 million barrels, according to a Platts survey of analysts.
The U.S. Department of Energy's weekly update on crude oil inventories is scheduled for 10:30 am ET.
"The cup of positive sentiment overfloweth into the crude complex overnight, meaning we approach this morning's weekly U.S. inventory report with hefty gains," commented Summit Energy analyst Matt Smith.
Energy stocks were trading in mixed territory. Chevron(CVX_) was falling 3.1% to $90.50; Exxon(XOM_) was sliding 3.1% to $68.99; Marathon Oil(MRO_) was up 0.2% to $25.53; Hess(HES_) was tumbling 2.4% to $54.67; Occidental Petroleum(OXY_) was losing 3.2% to $81.75; Double Eagle Petroleum(DBLE_) was rising 1.3% to $8.46; and Anadarko Petroleum(APC_) was declining 2.8% to $66.33.

Oil falls below $85 as traders eye EU debt crisis
Oil below $85 in Asia as EU debt crisis, weak US economy trigger week of sharp market moves


Associated Press, On Friday August 12, 2011, 6:52 am EDT
SINGAPORE (AP) -- Oil prices fell below $85 a barrel Friday in Asia as investors tried to make sense of a week of sharp zigzags in the equity and commodities markets.

Benchmark oil for September delivery was down $1.08 to $84.64 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose $2.83, or 3.4 percent, to settle at $85.72 on Thursday.

In London, Brent crude was down $1.01 to $107.01 per barrel on the ICE Futures exchange.

Crude has dropped from $100 last month and near $115 in May as concerns about the European debt crisis and weakening U.S. economic growth undermined investor confidence. Oil has rebounded from as low as $75.71 earlier this week, whipped around by surges and plunges in global stock markets and quick changes in investor sentiment.

"As the interpretation of eurozone conditions ebbs and flows, risk appetite will continue to fluctuate wildly on a day to day basis," energy analyst Ritterbusch and Associates said in a report. "Growing eurozone debt problems will remain regardless of short-term fixes."

Oil is now the same price as in February, before violence in Libya shut down almost all crude production from the OPEC nation.

The Labor Department said Thursday that the number of people who applied for unemployment benefits fell last week below 400,000 for the first time in four months, a sign that the job market may be improving. Traders will be closely watching the latest data on U.S. retail sales and consumer sentiment later Friday.

"We anticipate a renewed turn back to the downside that could evolve into fresh lows as early as next week," Ritterbusch said. "Our longer term outlook remains bearish as we still see an eventual crude price decline to the $73 1/2 area."

Some analysts expect strong crude demand in emerging economies, such as China, to offset weaker growth in the U.S., Europe and Japan. National Australia Bank said it forecasts crude will average $93 in the third quarter and $100 in the fourth.

"We still expect oil prices to grow over the medium term," NAB said in a report. "The growth outlook in the developing world remains robust and should help absorb any further downward pressure on prices."

In other Nymex trading in September contracts, heating oil fell 0.7 cent to $2.89 a gallon while gasoline dropped 0.3 cent at $2.82 a gallon. Natural gas futures advanced 0.6 cents at $4.11 per 1,000 cubic feet.