U.S. Consumer Confidence Data Weighs On Oil (SCO, DBO)
March 12, 2010 9:46 PM
Oil fell by 1% to $81 a barrel in trading on Friday, as investors became concerned about energy demand in the U.S., the world’s largest oil consumer, after a weaker U.S. consumer confidence number.
U.S. consumer sentiment saw a slight decline in early March, with Americans less positive about the labor market outlook. "The consumer confidence number and looking at the revision to January of the retail sales pulled crude back down," said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago. Oil prices may have also fallen after profit-taking from investors. Oil surged above $83 a barrel this week.
U.S. crude for delivery in April fell by $0.87 to close at $81.24, while Brent crude for delivery in April fell by $0.89 to close at $79.39 in London, on Friday.
Prices got little support from a report released, on Friday, by the International Energy Agency (IEA). The report said that world oil demand in 2010 will be slightly higher than previous estimates because of growth in developing countries. IEA expects world oil demad to average 86.57 million bpd in 2010.
Stock markets were calm on Friday as the weaker consumer confidence data was offset by data showing a jump in U.S. retail sales in February.
In New York, the ProShares UltraShort DJ-UBS Crude Oil (ETF) (NYSE: SCO) closed 2.70% higher at $12.91, while the PowerShares DB Oil Fund (ETF) (NYSE: DBO) closed 1.18% lower at $27.53. The ProShares UltraShort DJ-UBS Crude Oil ETF has a 52-week range of $12.25-$42.39, while the PowerShares DB Oil Fund ETF has a 52-week range of $17.43-$28.86.
