Oil prices surge ahead of United States sup­ply data

The China Post - - BUSINESS INDEX & -

Oil prices surged Tues­day as traders girded for a bullish U.S. crude stor­age re­port and the gov­ern­ment low­ered its fore­cast for Amer­i­can pro­duc­tion in the sec­ond half of 2015.

U.S. bench­mark West Texas In­ter­me­di­ate for de­liv­ery in July jumped US$2 to US$60.14 a bar­rel on the New York Mer­can­tile Ex­change.

Euro­pean bench­mark Brent North Sea crude for July de­liv­ery added US$2.19 to US$64.88 a bar­rel in Lon­don.

An­a­lysts ex­pect the weekly U.S. re­port on do­mes­tic com­mer­cial en­ergy stock­piles will show lower sup­plies on Wed­nes­day in a sign of a tighter mar­ket.

“I think we’ll see in­ven­to­ries come down,” said Carl Larry, a con­sul­tant for Frost & Sul­li­van in Hous­ton. “It will keep the mo­men­tum (on prices) to the up­side.”

Tues­day’s rise is “a lit­tle bit of a run be­fore the stats,” Larry added.

Mean­while, in its short-term en­ergy out­look Tues­day, the U.S. Depart­ment of En­ergy said U.S. oil pro­duc­tion stood at a lofty 9.6 mil­lion bar­rels a day in May, but that it is ex­pected to “gen­er­ally decline” through early 2016.

Oil prices have been choppy since the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries last week kept its pro­duc­tion ceil­ing un­changed, ig­nor­ing calls to cut out­put af­ter a big drop in crude prices over the last year.

An­a­lysts also cited data show­ing Chi­nese in­fla­tion fell to 1.2 per­cent in May. The weak in­fla­tion data sug­gest is the lat­est to sug­gest the world’s num­ber two econ­omy is stalling, po­ten­tially prompt­ing more mon­e­tary stim­u­lus.

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