NEW YORK, (Reuters) – Oil prices fell on Friday after data showing tepid U.S. economic growth in the third quarter left investors cautious ahead of expected monetary easing from the U.S. Federal Reserve.
U.S. crude futures did post a gain for the month and the first monthly close above $80 a barrel since April.
Disappointing data from Germany and India, end-of-month positioning and profit taking and the expiration on Friday of U.S. November refined oil products contracts also combined to provide volatility and pressure oil, industry sources said.
U.S. crude for December delivery fell 75 cents, or 0.91 percent, to settle at $81.43 per barrel, well above the $80.56 intraday low. Crude prices slipped 26 cents on the week, but were up $1.46 from $79.97 at the end of September.
Total crude trading volume was just over 450,000 lots with about an hour left of post-settlement trading, well below the 30- and 250-day moving averages that were both more than 650,000 lots.
In London, ICE Brent December crude fell 44 cents, or 0.53 percent, to settle at $83.15 a barrel.
The U.S. economy grew at a 2.0 percent annual rate, up from 1.7 percent in the second quarter, the government reported, in line with expectations but not enough to reduce high unemployment.
“The sentiment was that 2 percent growth was not robust enough to get people excited and there was the disappointing consumer sentiment report,” said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
“But there was no follow through selling below $81 and the market is still stuck in an $80-$84 range ahead of next week’s events.”
Investors remained cautious ahead of U.S. mid-term elections next Tuesday and prospects that the Fed will announce another round of asset buying next Wednesday.
U.S. consumer sentiment in October hit its weakest level since November, according to the Thomson Reuters/University of Michigan’s final October reading.
A strong dollar pressured crude early, but the dollar index .DXY seesawed and the greenback fell sharply against the yen on the expectations of more monetary easing by the U.S. central bank. But the dollar held on to a gain versus the euro.
U.S. stocks ended mixed and little changed as investors assessed prospects for monetary stimulus by the Fed and elections that could alter the balance of power in Washington.
Disappointing data out of Germany, Europe’s largest economy, also weighed on oil. Germany’s retail sales in September posted their biggest monthly drop in 2-1/2 years.
“People are very worried about a slowdown in economic growth,” said Tetsu Emori, a fund manager at Tokyo-based Astmax Co Ltd. “Industrial production in some countries is quite weak.”
India’s domestic oil product sales fell an annual 1.9 percent in September, its second straight monthly decline, government data showed on Friday.
India’s crude imports declined an annual 21.9 percent to 10.94 million tonnes or about 2.67 million barrels per day in September when Indian refiners processed 10.2 percent less oil versus a year ago.
The French strike over pension reforms eased further on Friday. Workers at the Fos-Lavera oil terminal near Marseille voted to end a month-long strike, and oil tankers were to start unloading later on Friday.
Late on Friday, a report from the Commodity Futures Trading Commission showed that money managers raised net long crude oil positions on the New York Mercantile Exchange in the week through last Tuesday.
The increase came as U.S. crude futures rose to $82.55 a barrel on October 26 from $80.16 on October 19.