Services sector data hurts crude prices

Crude oil prices gave up early gains Tuesday after a report from the Institute for Supply Management showed that the services sector did not expand as quickly as had been expected in June.

The ISM’s non-manufacturing index remained in expansion but dropped to 53.8 in June after remaining at 55.4 in March, April and May, while it had been expected to settle at 54. 5 last month.

A reading of over 50 on the ISM’s index indicates expansion, while a reading under 50 shows contraction.

August contracts for West Texas Intermediate crude was down 12 cents to $72.02 per barrel in afternoon trade on the New York Mercantile Exchange after trading above $73 per barrel earlier in the day as equities markets gained and the US dollar weakened, while Brent crude was up 5 cents at last report, to $71.52 per barrel on the ICE Futures Europe exchange in London.

Nymex August gasoline futures and August heating oil futures each added a cent in afternoon trade, to $1.97 per gallon and $1.92 per gallon respectively, while August natural gas futures were down 5 cents to $4.74 per million British thermal units.

Retail prices for regular unleaded gasoline in the United States were down following the Independence Day holiday, falling 2.6 cents from Friday’s level to $2.724 per gallon on average nationally.

Some analysts are predicting that pump prices will not rise substantially between now and the end of the US summer driving season on Labor Day, to be celebrated this year on 6 September, against forecasts earlier in the year that the retail price of a gallon of regular unleaded gasoline would top $3 this summer.