Oil rises a fourth day in New York
Oil traded near its highest in 12 weeks in New York on speculation China’s government will boost the economy of the world's second-biggest crude consumer.
By Bloomberg | Updated:
BELFAST: Oil traded near its highest in 12 weeks in New York on speculation China’s government will boost the economy of the world’s second-biggest crude consumer, while European leaders prepared to tackle the region’s debt crisis. Prices gained as much as 0.8% after settling on Tuesday at the highest in almost three months. Chinese Premier Wen Jiabao said economic policy will be finetuned as needed and the industry ministry said it is studying “stimulative policies” for smaller companies.
European government heads will hold a summit today to agree on a plan to rein in a sovereigndebt crisis that threatens to curb economic growth and slow demand for commodities. “Crude oil has been extremely macro-driven lately because of the European crisis,” said Filip Petersson, commodity strategist at Stockholm-based SEB AB. “The general trends have been in the same direction as equities.” Crude oil for December delivery was at $93.71 a barrel, up 54 cents, in electronic trading on the New York Mercantile Exchange at 10:48 am London time.
The contract on Tuesday increased 2.1% to $93.17, the highest settlement since August 2. Prices are up 2.5% this year. December futures were at a 16-cent premium to January, compared with 24 cents at Tuesday’s close. The front-month contract settled higher than the next month October 24 for the first time since November 20, 2008. The so-called backwardation typically signals an increase in demand or decline in supply in the near term.
Brent oil for December settlement was down 7 cents, or 0.1%, at $110.85 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $17.15 to New York crude., compared with a record settlement of $27.88 on October 14. “At the moment , it is all to do with spreads,” Amrita Sen, a London-based analyst at Barclays Plc wrote in an email .
“All crudes should be in backwardation. Demand-supply mismatches are growing and inventories are falling fast.” Chinese officials will make policy adjustments at a “suitable time and by an appropriate degree ,” Wen said in a statement published late Tuesday. The Ministry of Industry and Information Technology and other government agencies will work to help small businesses facing difficulties, it said separately in a statement on Wednesday.
European government heads will hold a summit today to agree on a plan to rein in a sovereigndebt crisis that threatens to curb economic growth and slow demand for commodities. “Crude oil has been extremely macro-driven lately because of the European crisis,” said Filip Petersson, commodity strategist at Stockholm-based SEB AB. “The general trends have been in the same direction as equities.” Crude oil for December delivery was at $93.71 a barrel, up 54 cents, in electronic trading on the New York Mercantile Exchange at 10:48 am London time.
The contract on Tuesday increased 2.1% to $93.17, the highest settlement since August 2. Prices are up 2.5% this year. December futures were at a 16-cent premium to January, compared with 24 cents at Tuesday’s close. The front-month contract settled higher than the next month October 24 for the first time since November 20, 2008. The so-called backwardation typically signals an increase in demand or decline in supply in the near term.
Brent oil for December settlement was down 7 cents, or 0.1%, at $110.85 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $17.15 to New York crude., compared with a record settlement of $27.88 on October 14. “At the moment , it is all to do with spreads,” Amrita Sen, a London-based analyst at Barclays Plc wrote in an email .
“All crudes should be in backwardation. Demand-supply mismatches are growing and inventories are falling fast.” Chinese officials will make policy adjustments at a “suitable time and by an appropriate degree ,” Wen said in a statement published late Tuesday. The Ministry of Industry and Information Technology and other government agencies will work to help small businesses facing difficulties, it said separately in a statement on Wednesday.
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