Oil dips after hitting $50/bbl; U.S. stocks steady

Thu May 26, 2016 5:38pm EDT
 
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By Caroline Valetkevitch

NEW YORK (Reuters) - Oil prices eased on Thursday after topping $50 a barrel for the first time in about seven months, while U.S. stocks ended near flat after two days of strong gains.

Concern that robust oil price gains could encourage more output weighed on the energy market. Oil futures have risen nearly 90 percent from 12-year lows hit this winter.

"The global surplus still exists and there is still a possibility that oil prices could retrace further," said Dominick Chirichella, senior partner at the Energy Management Institute in New York.

Brent dipped 15 cents to settle at $49.59 after earlier rising to $50.51, its highest level since early November. U.S. crude futures fell 8 cents to settle at $49.48 after rising to $50.21, the highest level since mid-October.

U.S. stocks ended nearly flat after gaining 2 percent over the previous two sessions, with advancing defensive sectors offsetting declines in materials, banks and other cyclical industries.

Equity investors this week have grown more comfortable with expectations the Federal Reserve could raise interest rates as soon as June, with many taking the view that such a hike would reflect improvement in the country's economy.

"People are taking their foot off the gas after making a bunch of money, and now they're waiting for the next data point," said Phil Blancato, chief executive of Ladenburg Thalmann Asset Management in New York.

The Dow Jones industrial average ended down 23.22 points, or 0.13 percent, at 17,828.29, the S&P 500 lost 0.44 points, or 0.02 percent, to 2,090.1 and the Nasdaq Composite added 6.88 points, or 0.14 percent, to 4,901.77.   Continued...

 
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 25, 2016.  REUTERS/Brendan McDermid