Chinese Data Supports Crude Oil
Crude oil declined, as doubts about a US fiscal cliff deal eclipsed optimism about fresh economic stimulus from the Federal Reserve. Nymex crude oil prices declined around 0.8 percent yesterday taking cues from statement of House Speaker John Boehner that government is not serious in cutting its spending and US retail sales also grew at slow pace. Additionally, unresolved US fiscal cliff issue also exerted downside pressure on the crude oil prices.
Other news affect crude prices was information that Taiwan resumed Iranian crude imports from November after seven months as refiners sought to fulfill contractual commitments with the National Iranian Oil Co, refinery officials said yesterday. OPEC does not see increased US oil output as a threat to its interests but is skeptical about current forecasts on the boom of American shale gas production, a senior official of the 12-nation group said. While U.S.-based refiner Phillips 66 reported that it would support exports of crude oil from the United States, arguing the boost they would give the country’s economy would trump the higher costs for the company and for American consumers.
OPEC agreed on Wednesday to retain its output quotas at the same levels it has kept since 2011 despite the prospect of rising inventories in the first half of next year.
China’s oil refinery output will increase to about 42 million metric tons in December, up 7.3 percent indicating that the country’s economy is gradually warming up at the end of the year, said Shanghai-based industrial information provider ICIS C1Energy.
News from China this morning showed the Chinese PMI continues to expand with the HSBC report printing above last month’s data at 50.90 adding to future demand for oil consumption.
Crude is trading at 86.56 adding a few pips after the Chinese data release.
Nymex natural gas prices declined by 1.6 percent yesterday on the back of unexpected rise in US natural gas inventories. Additionally, strength in the DX also exerted downside pressure on the prices. Gas prices touched an intra-day low of $3.293 and closed at $3.341 in yesterday’s trading session. US Energy Information Administration (EIA) released its weekly inventories yesterday and US natural gas inventory rose unexpectedly by 2 billion cubic feet (bcf) which stood at 3.806 trillion cubic feet for the week ending on 7th December 2012.