NEW YORK --- The price of crude-oil futures climbed as much as $2 a barrel Monday, June 2, as new U.S. manufacturing figures helped ease concerns over slowing demand for oil, MarketWatch reported. News that the hurricane season's first Atlantic storm missed key oil installations in the Gulf of Mexico kept price gains in check.
Crude oil for July delivery was last up $2 at $129.35 a barrel in morning trading on the New York Mercantile Exchange, compared to an earlier low of $125.30.
The market had opened "weaker due to the failure of the Tropical Storm Arthur to affect Mexican production," Michael Lynch, president of Strategic Energy & Economic Research (SEER), told MarketWatch. "The weak U.S. economy is weighing heavily on demand, but the new ISM numbers, which are moderately bullish, might put a floor under oil prices," he added in e-mailed comments.
Traders have worried that high oil prices have hurt demand, but the latest economic data may help ease those concerns in the near-term.
Crude-oil prices had dropped sharply last week, losing 3.7 percent after reaching a record high above $135 a barrel on May 22.
Charles Perry, president of energy consulting firm Perry Management, told MarketWatch there was likely a "giant profit taking last week," with trading volume shooting up Thursday and Friday, reaching about 45 million contracts on Friday. "So today, the traders are establishing a new position at a lower price," he said.
The short-term direction of oil price is expected to hinge on whether U.S. and global demand remains strong.