Monday, July 19, 2010

Crude Oil Rises for a Second Day on Optimism Fuel Demand Will Increase

Crude oil rose for a second day in New York on optimism that China’s expanding economy and a forecast that U.S. crude supplies declined last week will show signs of improving fuel demand.
Oil gained as China’s stocks advanced for a second day as rising domestic consumption boosted the earnings of automakers. U.S. crude inventories probably dropped in the seven days ended July 16, the fourth consecutive week of declines, a Bloomberg News survey showed before a Department of Energy report tomorrow.

“China’s upside really is its restocking ability and its underlying economic growth, I can’t see too much weakness in that market,” said Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. Crude oil for August delivery gained as much as 37 cents, or 0.5 percent, to $76.91 a barrel in electronic trading on the New York Mercantile Exchange, and was at $76.80 at 1:59 p.m. Singapore time. Yesterday, it rose 53 cents, or 0.7 percent, to $76.54. The August contract expires today.

The more active September contract increased 22 cents, or 0.3 percent, to $77.12 a barrel. Futures have declined 3.4 percent this year. The dollar was at $1.2972 per euro at 1:46 p.m. Singapore time from 1.2942 in New York yesterday. A weaker dollar increases the investment appeal of commodities like oil. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 43.85, or 1.8 percent, to 2,519.28 as of 1:19 p.m. local time, set for the highest since June 28.....Read the entire article.

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