Wednesday, June 30, 2010

Crude Oil Rises, Snapping Two Days of Declines as Dollar Weakens

Crude oil headed for a monthly increase, before a report forecast to show crude inventories declined in the U.S., the world’s largest energy user. Hurricane Alex has halted about 25 percent of crude production in the Gulf of Mexico and 9 percent of natural-gas output, the U.S. government said. U.S. crude stockpiles probably dropped 1 million barrels in the week ended June 25 from 365.1 million the prior week, according to a Bloomberg News survey before today’s Energy Department report. Crude was still heading for its first quarterly decline since 2008.

“Today’s Energy Department data may help prices,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. “While the supply picture does not support crude in the short term, demand is becoming a bit better. Much depends on risk aversion, so if equity markets recover, crude will go up.” Oil for August delivery traded for $75.96 a barrel, 2 cents higher on the New York Mercantile Exchange as of 1:35 p.m. London time. Brent crude for August delivery was up 2 cents at $75.46 a barrel on the ICE Futures Europe exchange in London.

Crude has lost 9.3 percent in New York since the end of March and 4.3 percent this year. The commodity pared earlier gains of as much as 1.2 percent after data from ADP Employer Services showed the U.S. added fewer jobs than economists estimated in June. The contract has advanced 2.8 percent in June. The Dollar Index, which measures the U.S. currency against those of six major trading partners, fell for the first time in three days, losing 0.3 percent on concern economic growth may falter, stoking demand for commodities as an alternative investment.....Read the entire article.

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