Crude Oil Gains on Supply Uncertainty
Crude oil futures gained on Tuesday despite stronger US dollar as investors were concerned over global oil supplies on threat of Syrian conflict may be spreading to other mid eastern countries. Moreover, the move of China for tackling slower growth in their economy also boosted the investors’ sentiment. On Tuesday, the People’s Bank of China offered 265 billion yuan equivalent to $42.1 billion through reverse purchase agreements in open market operations. The move by central bank was taken as measure for easing the liquidity conditions in the banking sector. Governor People’s Bank of China, Mr. Zhou Xiaochuan commented that monetary policy must remain flexible and should set with a preemptive bias to counter the weak external environment.
Technical analysts were of the opinion that oil prices were at attractive levels after two bearish sessions and bargain hunters also stepped in resulting in a technical bounce.
Crude oil futures contract for November delivery gained 3.4 percent or $3.06 to settle at $92.39 per barrel on the New York Mercantile Exchange. There were some negative developments too globally which got overlooked by oil investors as according to the International Monetary Fund, the global economy is expected to grow by 3.3 percent now as compared to IMF’s earlier projection of 3.5 percent. IMF also reduced its forecast for economic growth of 2013 to 3.6 percent from 3.9 percent.
Among other energy commodities, gasoline futures contract for November delivery advanced 2.3 percent or $0.07 to settle at $2.96 per gallon while heating oil futures for the same month gained 1.9 percent or $0.06 to settle at $3.20 per gallon.
Natural gas futures contract for November delivery climbed 1.9 percent or $0.06 to settle at $3.47 per million British thermal units.