|News||Crude jumps to $84 per barrel this morning due to support from Asian data|
|Analysis||Crude climbed this morning above $84 per barrel after further signs of economic recovery continued to emerge from the Chinese and Japanese economies, supported by heightened optimism throughout financial markets over the global economic recovery.|
Manufacturing expanded in China at a faster pace, where the PMI inclined in March to 55.1 compared to the previous 52.0; while the index continues gaining and insures growth in the sector in China, which is considered to be once of the largest industrial countries in the world, thus supporting demand on oil since it is considered to be a vital substance that enters in numerous industries.
Japan’s Tankan’s first survey reported a rise in confidence levels in the industrial sector for the fourth consecutive quarter; thus, supporting the rise witnessed in oil prices recording their highest around $84.30 per barrel.
The improvement witnessed in Asian data in its own role support all expectations regarding these economies being the first in lifting the global economy from the recession, where the Chinese economic expansion is expected to beat expectations and surely to beat other nations.
The dollar dropped against a basket of foreign currencies and thus attracting investors into purchasing commodities and high yielding assets, on high confidence levels in markets.Furthermore, the release of the weekly EIA report yesterday showed a rise in oil inventories by 2.9 million barrels, compared to the previous reading of 7.3 and higher than the expected 2.4 million barrels, where stockpiles are at 354.2, above the medium term average range for this time of year. Meanwhile, motor gasoline gained by 0.3 million barrels last week while distillate fuel that includes heating dropped by 1.1, and also both remain above the medium term average range for this time of year. This ascend in inventories is considered to be the ninth in a row, reflecting weak demand on oil, which plays a role in preventing oil prices from further surging to the upside.
The S&P GSCI index closed yesterday at 530.16 after rising by 3.70; whereas the RJ/CRB commodity index plunged by 0.38 to close around 273.34.
In NYMEX as of 03:14 EST; heating futures advanced to $218.740 per gallon by $0.840; motor gasoline is trading around $231.710 per gallon after climbing by $0.990; whereas natural gas followed and rose by $0.08 to record $3.877 per 1000 cubic feet. In London, Brent jumped by $0.420 to record $83.120.
Crude opened today around $83.35 recording its highest at $84.50 and lowest around $83.20 per barrel, while it currently trades around $84.40 per barrel.