NewsCrude trades above $75 on high confidence in global marketsPreviousForecastAnalysisCrude today is hovering around $75 per barrel after the reported heavy drop in US commercial crude inventories and a notable drop in jobless claims. The new bolstered confidence and eased fears over the outlook for the biggest energy consumer in the world.
Crude today hovered around $76 per barrel recording its highest around $75.95 and lowest around $75.60, while it currently around $75.85 per barrel.
The EIA report yesterday showed a drop in crude inventories by 5.0 MB, compared to the prior reading of 2.0 MB but better than the previous forecast of 1.8 MB, where inventories are currently around 358.20 MB above the medium term average range for this time of year.
Meanwhile, motor gasoline gained 1.3 MB, distillates that include heating rose 0.3 MB above the medium term average; demand on crude has risen by 3.2% to 19.6 MB, while imports have receded.
Crude yesterday opened around $74.80 per barrel recording its highest around $75.95 and lowest around $74.35 per barrel, closing around $75.85 per barrel. It managed to record a rise of $1.37 by 1.9% due to lower US inventories and optimistic sentiment in the market.
Moreover, the US Labor Department reported a drop in initial jobless claims to 454.000, thus reflecting improved conditions in the jobs market as more companies have hired more workers in June. Meanwhile, the IMF raised the world growth forecast for 2010 to 4.6% from the prior 4.2%, and thereby crude’s rise yesterday was supported by the recovery expectations pushing global indices to the upside consequent to improved confidence in the global economy.
On the other hand, the ECB yesterday maintained it benchmark interest rate at its previous level, where the bank did not make any adjustments on the bond purchasing policy. Meanwhile, Trichet insured post to the interest rate decision that the ECB’s interference in the bond purchases measures will remain intact, although they may plan extra measures if required after the stress test; while global economic recovery will remain at a moderate and uneven pace, as inflation levels will stay grounded.
He also mentioned that the stress test is vital for restoring confidence levels in the European financial system, since it assess the banks’ ability to bear losses for purchasing bonds and governmental loans.
As for NYMEX as of 02:30 EST; motor gasoline gained $206.500 per gallon by $1.390; heating is trading around $201.750 per gallon rising by $1.220; whereas natural gasoline also climbed $0.011 per 1000 cubic feet by $4.410. In London, Brent futures rose by $0.390 to record $75.100.