Futures Market News
Crude oil futures climb as U.S. supplies slip
Apr 11, 2012 01:15 PM
The price of crude oil futures gained on Wednesday as inventories of fuel dropped in the U.S., according to Bloomberg.
Another driver pushing up the price of the energy commodity is an executive board member of the European Central Bank indicating the financial institution is poised to help stave off the sovereign debt crisis' spread elsewhere in the region.
Benoit Coeure suggested the ECB is set to begin anew with the sale of bonds for Spain, which is drawing increased scrutiny and attention as the next victim of the sovereign debt crisis that has been thrashing about in the 17-nation euro zone for more than two years.
The U.S. Energy Department indicated supplies of gasoline dropped 4.28 million barrels during the week prior and inventories of distillate fuel, which encompasses heating oil and diesel fuel, fell 4 million barrels.
"The drawdown in gasoline and distillate was the big surprise today," analyst and broker Chris Dillman with Tradition Energy in Connecticut told Bloomberg. "The product supply numbers are sending the entire market higher."
At 12:04 p.m. on Wednesday, crude oil futures gained 0.13 percent, a 15 cent rise to $120.03 per barrel.
The prospects of a bond-purchasing program to be administered by the ECB helped drive up the value of the shared currency of the European Union against the world's reserve currency. The ECB is aiming to reduce expenses and costs germane to borrowing as Spain's bond yields have been touching levels akin to those of Ireland, Portugal and Greece immediately prior to when those nations solicited emergency bailout aid.
"The dollar came under pressure and oil rose after an ECB official hinted that the bank may purchase Spanish bonds," also an analyst and broker Gene McGillian with Tradition Energy told Bloomberg.
Mariano Rajoy, three months into his term as Spanish prime minister, is encountering challenges persuading investors as to his administration's ability to cut down on the budget deficit.
Dow Jones Newswires reports crude oil inventories gained 2.8 million barrels for week ended April 6. The news service forecast increases of 2.2 million barrels.
But, since reaching their recent highs during the month of March, the energy commodity has lost about 8 percent of its value. Drivers of that downgrade include a reduced amount of tension regarding oil-rich Iran and its nuclear ambitions, which drew sanctions against oil exports from western nations.
Fundamentals have lowered for supply and demand in the U.S., the globe's top consumer of the energy commodity, which also pulled down the price of crude oil. Inventories have increased more than anticipated while consumption of the energy commodity has fallen.
Developed nations' discussions about restricting crude oil's rise in prices by releasing from strategic reserves also reduced prices on the market, Dow Jones Newswires reports.
"The air that was injected into the market in February has been leaking out slowly," states the Schork Report.
China, the globe's second-largest consumer of crude oil, is going through an economic slowdown, which also serves as a burden to the energy commodity.
The Asian nation is embroiled in a standoff with the Philippines in oil- and gas-rich waters in the South China Sea, according to The Sydney Morning Herald.
Circling around fishing, the dispute began with Philippine officials attempting to charge Chinese fishermen on eight boats. But their efforts were quashed by two marine surveillance ships, according to the foreign affairs department in Manila.
China believes the waters are under its jurisdiction yet the Philippines is attempting to garner support for territorial disputes.
''It's the law of physics: two competing parties cannot occupy the same space at the same time,'' politics professor Carlyle Thayer with the ADF academy in Canberra told The Sydney Morning Herald.
Don’t Miss Our News Updates!
Share dt News:
Follow our breaking news stories and get a unique take on current events that may impact the commodity futures markets. Multiple new articles are posted each weekday. Subscribe to our commodity news updates by email, and receive real-time updates with our RSS feed, follow us on Twitter @DanielsTrading, become a fan on Facebook to stay informed.
SPECIAL OFFER: Euro/Dollar in a Time of Crisis
Sign up for our FREE report and gain insight about the current global crisis through our extensive research and analysis!
Download this exclusive report as we examine current global events, the present impacts on market prices and volatility, and potential outcomes of the Eurozone crisis.
Special Offer
Register for Your Free 2-Week Trial of the dt Insider Market Advisory!
With your free trial membership, you'll receive full access to our exclusive trade recommendation service and all of the timely and accurate trade information you need to feel comfortable participating in the markets.
