NEW YORK–Oil prices traded near flat Friday after U.S. crude entered a bear market in the previous trading session.
As of Thursday, U.S. prices had slid more than 20% since their highs in June, meeting a common definition of a bear market. Oil rallied earlier this year on expectations that cuts in drilling activity and investment will rebalance the market, but fell back in recent weeks as the global oversupply of crude showed few signs of abating.
‘We continue to have concerns that the oil market could be oversupplied for longer than we previously anticipated,’ said Jason Gammel, oil analyst at Jefferies.
The U.S. recently traded up eight cents, or 0.2%, at $48.53 a barrel on the New York Mercantile Exchange. Brent, the global , fell 30 cents, or 0.5%, to $54.97 a barrel on ICE Futures Europe.
The Wall Street Journal Dollar Index, which tracks the dollar against a range of other currencies, rose 0.3% Monday. As oil is priced in dollars, it becomes more expensive for holders of other currencies as the U.S. unit appreciates.
Earlier Friday, Chinese manufacturing data disappointed markets.
The Caixin China Manufacturing Purchasing Managers’ Index’s initial reading stood at 48.2 in July, compared with a final reading of 49.4 in June. The reading is at a 15-month low and was significantly below market expectations.
‘The concerns about demand that had already emerged recently have been reinforced following weak Chinese data,’ said analysts at Commerzbank. China is the world’s second-largest consumer of oil and signs of a slowdown in its economy usually spark worries in the oil market.
Later Friday, Baker Hughes Inc. will publish the latest U.S. oil-drilling rig count. The number of rigs has fallen sharply since oil prices headed south last year. There are now about 60% fewer rigs working since reaching a peak of 1,609 in October.
The rig count, however, has stabilized in recent weeks and the so far hasn’t led to a significant decline in U.S. oil output, which remains near multi-decade highs.
Gasoline futures recently fell 0.8% to $1.8376 a gallon. Diesel futures fell 0.1% to $1.6524 a gallon.
Eric Yep and Nicole Friedman contributed to this article.
By Georgi Kantchev WSJ July 24, 2015