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Crude drops on profit taking, supply concerns

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Shutterstock photo - - Crude prices dropped but remained range bound on Friday after investors locked in gains from upbeat U.S. data and sold the commodity for profits in a selloff fueled by concerns that the world is awash in crude.

In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in October traded down 0.90% at $93.11 a barrel during U.S. trading. New York-traded oil futures hit a session low of $92.94 a barrel and a high of $94.05 a barrel.

The October contract settled up 0.55% at $93.96 a barrel on Thursday.

Nymex oil futures were likely to find support at $92.50 a barrel, Thursday's low, and resistance at $94.45 a barrel, Thursday's high.

Positive economic indicators hitting the wire on Thursday sent oil prices ripe for profit taking on Friday.

The Federal Reserve Bank of Philadelphia said that its manufacturing index topped a three-year high of 28.0 this month from July's 23.9 reading. Analysts had expected the index to decline to 19.2 in July.

Separately, market research group Markit said that its preliminary U.S. manufacturing purchasing managers' index increased to a four-year high of 58.0 this month from a final reading of 55.8 in July. Analysts had expected the index to ease down to 55.7 in August.

Data also showed that U.S. existing home sales increased 2.4% to 5.15 million units last month from 5.03 million in June. Analysts had expected existing home sales to dip 0.4% to 5.02 million units in July.

Also on Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Aug. 16 decreased by 14,000 to 298,000 from the previous week's revised total of 312,000.

Analysts had expected jobless claims to fall by 12,000 to 300,000 last week.

Despite evidence that the U.S. economy is growing steam, slackness elsewhere in the global economy has resulted in a supply glut, many investors fear, which also pushed prices down on Friday.

Separately, on the ICE Futures Exchange in London, Brent oil futures for October delivery were down 0.43% and trading at US$102.19 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$10.08 a barrel. offers an extensive set of professional tools for the financial markets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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