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News // Markets & Stocks

Oil prices rose, boosted by US financial market growth

21 July 2010 , 09:52Reuters1921

 

 

Oil rose more than 1 percent Tuesday, up a second day as U.S. stocks bounced higher from early lows. A tropical weather threat ahead of weekly oil inventory reports which is expected to show lower crude stockpiles also provided support. U.S. light, sweet crude for August delivery rose 90 cents, or 1.18 percent, to settle at $77.44 a barrel at the contract's expiration. The more liquid September contract rose 68 cents, or 0.88 percent, to settle at $77.58. London Brent crude for September delivery rose 60 cents to settle at $76.22. "Expectations of another stock draw in domestic crude oil stocks are supporting the rise in crude futures. Also, the S&P 500 has come back up and that is also supportive," said Andy Lebow, broker at MF Global in New York. Wall Street shrugged off disappointing reports from Goldman Sachs and IBM and bounced from early lows to end in positive territory.

 

Traders said data showing U.S. housing starts fell more than expected in June to the lowest level in eight months dampened markets early, but data showing a rise in permit applications offered some hope that home building might pick up. Adding a lift to oil prices, the U.S. National Hurricane Center on Tuesday raised to 60 percent the chances a tropical wave near Puerto Rico will become a tropical depression. The NHC has forecast this year's Atlantic storm season may be the most intense since 2005, when hurricanes Katrina and Rita hit the U.S. Gulf Coast's energy output and infrastructure particularly hard.

 

U.S. crude oil inventories were expected to have fallen a fourth straight week, by 1.4 million barrels, according to an expanded Reuters survey on Tuesday. But products stocks were forecast to be higher. Gasoline stocks were expected to be up 900,000 barrels, posting a fourth consecutive weekly rise in the middle of the U.S. summer driving season. Distillate fuel inventories, including heating oil and diesel, were expected to be up 1.6 million barrels, which would be an eighth straight rise. The industry group American Petroleum Institute's inventory report is due out at 4:30 p.m. EDT. The U.S. Department of Energy will publish its oil statistics on Wednesday at 10:30 a.m. EDT. Ahead of the inventory reports, MasterCard said on Tuesday that U.S. weekly retail gasoline demand rose 1.3 percent in the week ending July 16 against the prior week.

 

The survey also showed gasoline demand rose versus the 2009 period and that the four-week average was up from year ago. Prices have been stuck in a range between $71 and $80 for more than six weeks as volatility related to the European debt crisis has dwindled. The bullish effect of crude inventory drops have been offset by weaker U.S. macroeconomic indicators that fueled concerns about a slower economic growth. 

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