News Column

Crude Oil Snaps 9-Day Loss To End Higher

July 10, 2014

WASHINGTON (Alliance News) - US crude oil snapped a nine-day loss to end higher Thursday, on bargain hunting and after data from the US showed initial claims for unemployment benefits to have declined more than expected last week. Investors also mulled over the official weekly oil report released Wednesday which showed a decline in US crude oil inventories, albeit less than expected.

Crude oil slipped for a ninth straight day Wednesday, on easing concerns of supply disruption from the Middle East with reports of increased production and export from Libya. It was the longest losing streak for oil since December 2009.

The US Federal Reserve indicated no change to its outlook on interest rates, with the central bank providing no clue as to when it is likely to start a tightening cycle. Investors also weighed some mixed economic data from the US and China, with US weekly jobless claims dropping more than expected and wholesale inventories rising less than expected.

Chinese exports expanded less than expected in June signaling that foreign demand provide insufficient support for the economy to achieve its 7.5% growth target.

Disappointing industrial production data from France and Italy has raised concerns about eurozone economic recovery, also kept limited gains for crude oil. Meanwhile, the Bank of England has kept its interest rate at a historic low the size of quantitative easing at GBP 375 billion as expected by economists.

Light Sweet Crude Oil futures for August delivery, the most actively traded contract, gained USD0.64 or 0.6% to close at USD102.93 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for August delivery scaled a high of USD103.00 a barrel intraday and a low of USD101.55.

Meanwhile, a forecast from EIA said, crude oil production in the US is likely to see a sharp rise in 2015, surging up to 9.3 million barrels.

The dollar index, which tracks the US unit against six major currencies, traded at 80.16 on Thursday, up from its previous close of 80.03 late Wednesday in North American trade. The dollar scaled a high of 80.20 intraday and a low of 79.98.

The euro traded lower against the dollar at USD1.3603 on Thursday, as compared to its previous close of USD1.3641 late Wednesday in North American trade. The euro scaled a high of USD1.3651 intraday and a low of USD1.3590.

In economic news from the US, a report from the Labor Department first-time jobless claims to have unexpectedly declined to 304,000 in the week ended July 5, down 11,000 from the previous week's unrevised level of 315,000. Economists had expected claims to come in unchanged compared to the previous week.

Meanwhile, a report from the Commerce Department showed wholesale inventories in the US to have risen by a slightly less than anticipated 0.5% in May, after jumping by a revised 1.0% in April. Economists had expected inventories to climb by about 0.6% compared to the 1.1% increase originally reported for the previous month.

China's exports grew 7.2% in June from last year, data from the General Administration of Customs showed Thursday. Although the annual growth was faster than the 7% rise posted in May, it was below the 10.4% increase forecast by economists.

China's imports also climbed by a less-than-expected 5.5% in June. It reversed May's 1.6% fall but was weaker than the expected 6% growth. Trade surplus dropped to USD31.6 billion from USD35.9 billion in May, when it was forecast to rise to USD36.9 billion.

In economic news from Europe, France and Italy reported a notable drop in industrial output in May, while the Dutch industrial production grew at a slower rate in May.

Elsewhere, the Bank of England kept its interest rate at a historic low with the size of quantitative easing at GBP 375 billion as expected by economists.

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Source: Alliance News

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