Oil Moves Back Up After China Data
Published Thursday, 09 August 2012 11:16 | Written by Amwal Al Ghad
Crude for September delivery CLU2 added 33 cents, or 0.4%, to $93.68 a barrel, as weak gains for Chinese consumer prices — and deflation for producer prices — stoked expectations for further policy easing from Beijing. Read more on Chinese economic data.
The Chinese data sent shares higher across Asia, while the U.S. dollar fell, with the ICE dollar index DXY slipping to 82.258 from 82.366 late Wednesday in North America.
A weaker U.S. currency can support dollar-denominated crude oil, as it makes the commodity cheaper to holders of other currencies.
The gains undid a 32-cent loss for September crude during Wednesday’s regular New York Mercantile Exchange session, with the market shrugging off an unexpectedly large drop in U.S. inventories. Read more on Wednesday’s oil trade.
Citi Futures analysts said the larger-than-expected drop in U.S. crude stocks — even as total inventories remained at relatively high levels — was largely accounted for by a weak gain in weekly imports.
“Rather than signalling a lack of global supply availability, we see this reduced rate of imports — when U.S. crude output and inventories are both high — as evidence the U.S. doesn’t need to import as much, leaving more overseas production for the balance of the world to share,” they said.
Elsewhere in the energy complex, September gasoline futures RBU2 pulled back fractionally, remaining at $2.98 a gallon, and September natural gas NGU12 dropped 2 cents or 0.6% to $2.92 per million British thermal units.
September heating oil HOU2 improved by less than a cent to sit at $3.02 a gallon.
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