WASHINGTON (DTN) -- Nearest delivered oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange edged lower in early trade amid consolidation following Wednesday's data-driven rally and morning release of downbeat economic figures from the eurozone, indicating the bloc's economy is tilting close to stagnation in the fourth quarter.
Near 8 a.m. ET, NYMEX December West Texas Intermediate futures were inched down to $55.90 per barrel (bbl) and the Intercontinental Exchange December Brent contract traded little changed at $61.17 bbl. NYMEX November ULSD futures were fractionally lower at $1.9635 gallon and the November RBOB contract moved down 0.73 cents to $1.6446 gallon.
Early Thursday morning, data was released showing continued deterioration in the eurozone's manufacturing and service sectors in October, once again driven by steep declines in the bloc's largest economy -- Germany. At just 48.6, Germany's business activity fell to a nearly seven-year low, while the manufacturing index was up marginally from September at 41.9, but still at a decade low and deep in contraction territory.
According to the survey, the eurozone economy was again struggling to achieve any growth in October. At 50.2 the reading held barely above the threshold separating growth and contraction this month -- a disappointing reading for departing chief of European Central Bank, Mario Draghi.
In September, ECB unveiled an aggressive stimulus package, cutting its interest rate deeper into subzero territory and reviving a bond-buying program indefinitely. Despite the stimulus, EU's consumer confidence index plunged a full percentage point below the September reading, down to minus 7.6% suggesting the central bank's efforts to stimulate growth may have come too late.
ECB is scheduled to make an announcement Thursday morning on the state of eurozone economy, with no expectations for further interest rate cuts.
Oil futures continue to draw support from the midweek inventory report, detailing across-the-board drawdowns from U.S. stockpiles, including a combined 5.8 million bbl decline in gasoline and distillate fuel supply during the week-ended Oct. 18. Against expectations of a large build, EIA reported the first crude draw in nearly seven weeks, bringing U.S. crude inventories in line with the five-year average. A larger-than-expected upswing in refinery activity of more than 2%, steep decline in crude imports and a higher export rate contributed to last week's stock draw.
The stock decline was also realized despite a third weekly drawdown from the Strategic Petroleum Reserve, down nearly 1 million bbl to 642.359 million bbl last week. In the three weeks of October, SPR inventories were drawdown nearly 3.5 million bbl, pressing reserves to the lowest level since early February 2004.
Liubov Georges can be reached at email@example.com
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