Oil prices ex­tend gains on strong US data


Crude ex­tended gains in Asia Fri­day fol­low­ing a 10 per­cent price surge in the pre­vi­ous ses­sion fu­elled by strong US eco­nomic data.

US bench­mark West Texas In­ter­me­di­ate (WTI) for Oc­to­ber de­liv­ery rose 52 cents to $43.08 while Brent crude for Oc­to­ber gained 23 cents to $47.79 in late-morn­ing trade. Both WTI and Brent on Thurs­day closed up 10.3 per­cent, af­ter hov­er­ing around six-and-a-half year lows all week on con­cerns about China s fal­ter­ing econ­omy.

"We are see­ing very strong vol­umes in Asian trad­ing... there s a bit of shock and dis­be­lief at the strength of the US eco­nomic data," Michael McCarthy, chief mar­ket strate­gist at CMC Mar­kets in Syd­ney, told AFP.

The rally comes af­ter the Com­merce Depart­ment re­ported the US econ­omy ex­panded at an an­nual rate of 3.7 per­cent in the sec­ond quar­ter, sharply above the ini­tial ap­praisal of a 2.3 per­cent gain. The more ro­bust April- June growth mainly re­flected higher in­vest­ment, state and lo­cal gov­ern­ment spend­ing, and con­sumer spend­ing than was re­ported in the ini­tial es­ti­mate. McCarthy said in­vestors were also buoyed by strong data on US durable man­u­fac­tured goods and crude in­ven­to­ries.

Durable goods or­ders in the world s big­gest econ­omy and key global econom- ic growth en­gine rose 2.0 per­cent in July, boosted by au­to­mo­biles, the US Com­merce Depart­ment said. The latest of­fi­cial stock­piles re­port re­leased Wed­nes­day mean­while showed a draw­down, in­di­cat­ing healthy de­mand.

Out­put how­ever slipped only slightly, leav­ing pro­duc­tion lev­els and over­all crude in­ven­to­ries at record lev­els. Ni­cholas Teo, mar­ket an­a­lyst at CMC Mar­kets in Sin­ga­pore, said "the fun­da­men­tals re­mained gen­er­ally un­changed". "El­e­vated US crude in­ven­to­ries, higher OPEC pro­duc­tion, and slow­ing global growth sug­gest that the sup­ply glut may per­sist for the rest of the year," Teo said. "This means any rally in oil prices may be an op­por­tu­nity to sell," he added.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.