Consumer Data No Help To Oil

New York, May 11th (TradersHuddle.com) - Thursday was the outlier. After snapping a six-day losing streak with a meager gain yesterday, oil was back to its losing ways to close the week despite some bullish consumer sentiment data. NYMEX-traded crude for June delivery lost 95 cents, or 1%, to settle at $96.13 a barrel. While traders see some support for the benchmark U.S. contract at $95 per barrel, but it must be noted that oil closed down 2.4% on the week. Oil was doomed by another strong day for the U.S. dollar as the PowerShares DB US Dollar Index Bullish (NYSE: UUP) closed higher by more than 0.1% on light volume. Unfortunately for oil bulls, economic data points were of no help. In economic news, the Thomson Reuters/University of Michigan's preliminary May reading of consumer sentiment jumped to 77.8 from 76.4 in April. That's the highest level since January and well above the reading of 76.2 economists expected.

The producer price index for April fell 0.2%, but excluding gas and food prices, the PPI rose 0.2%, according to the Labor Department. Economists expected the core number to be flat with a 0.2% increase excluding and food and energy costs.

Given that the U.S. consumer accounts for 70% of this country's GDP and that this country is the world's largest oil consumer, oil's tepid reaction to the consumer data indicates traders are focusing more on soaring U.S. oil inventories and concerns about Europe's sovereign debt crisis than they are strong data points.

Oil equities were mixed on the day as the S&P 500 and the Dow Jones Industrial Average both closed lower. Exxon Mobil (NYSE: XOM) closed higher, but rival Chevron (NYSE: CVX) took a small loss. Shares of Petrobras (NYSE: PBR), Brazil's state-run oil firm lost another 2.5% on rumors the company has delayed its first-quarter earnings report. Even with that speculation, the stock has been in a tailspin lately and is still flirting with its 52-week low.

Speaking of embattled companies, shares of Chesapeake Energy (NYSE: CHK), the second-largest U.S. natural gas producer, plunged almost 14% on volume that was better than triple the average daily turnover. Most of those losses were incurred late in Friday's session following the release of two SEC filings. In the first, Chesapeake delayed its first-quarter earnings report. In the second, Chesapeake said that it might delay or alter plans to sell some assets so it won't endanger compliance with the conditions set out by creditors, according to the Wall Street Journal.

Chesapeake's assets sales are seen as central to the company's ability to raise much-needed cash to stay afloat. Suffocating under a massive debt load, there has been rampant speculation that Chesapeake will be cash flow negative for the foreseeable future.