Connect to share and comment

Oil prices advance before latest US data

PlacardEnlarge
(Globalpost/GlobalPost)

Global oil prices climbed on Tuesday, but gains were capped by persistent worries over a credit crunch in China, which is the world's top energy consuming nation.

Dealers also awaited US economic data for clues on when the Federal Reserve will begin winding down its massive stimulus programme.

Brent North Sea crude for delivery in August rose 65 cents to $101.81 per barrel in London midday deals.

New York's main contract, West Texas Intermediate light sweet crude for August, added 71 cents at $95.89 a barrel, after rebounding sharply Monday on news of the closure of Canadian pipelines.

"Crude prices are struggling to gain significant ground but have managed to pick up off multi week lows as Chinese liquidity concerns and weaker flash PMI released last week continue to weigh on the global demand outlook, side-lining many investors," said Sucden analyst Kash Kamal.

He added: "Data due to be released this afternoon could send mixed signals to traders as better than expected Richmond Fed indices, durable goods orders, housing data and API forecasts will encourage markets."

Data on US home prices and durable goods orders in May and consumer confidence in June will be released later on Tuesday.

Further ahead, the US commerce department's third estimate of US gross domestic product (GDP) in the first quarter of 2013 will be released on Wednesday.

"Nobody seems to want to take upward positions in the market at the moment," David Lennox, resource analyst at Fat Prophets in Sydney, told AFP.

"The latest US GDP figures and other important economic numbers coming out later this week will give an indication of the direction of the US economy and the Fed," Lennox said.

He added that investors were anticipating fairly upbeat data, which could compel the US Federal Reserve to reel in its $85-billion-a-month bond-buying later this year.

Fed chairman Ben Bernanke last week said the US central bank could begin to scale back the scheme if the economy continued to improve.

burs-rfj/hd

http://www.globalpost.com/dispatch/news/afp/130625/oil-prices-advance-latest-us-data