BLBG: Crude Oil Trades Near Five-Week High on Gains in Stock Markets
Crude oil traded near a five-week high as gains in the stock market increased optimism that the global economy is recovering.
Oil rose last week as an improvement in U.S. consumer confidence raised expectations fuel demand will increase. Asian equities climbed today on a report that manufacturing in China, the world’s second-largest crude user, had gained for the first time in nine months.
“The market is very much ignoring the current negative supply fundamentals and looking to derive positive demand fundamentals from equity market performances,” said Mark Pervan, a senior commodity strategist at Australia and New Zealand Banking Group Ltd. in Melbourne.
Crude oil for June delivery was at $53.45 a barrel, up 25 cents, in after-hours electronic trading on the New York Mercantile Exchange at 2:09 p.m. Singapore time.
The contract jumped 4.1 percent to $53.20 a barrel on May 1, the highest settlement since March 26, after the Reuters/University of Michigan U.S. consumer sentiment index rose for a second month and an index of manufacturing reached a seven-month high.
The CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 50.1 in April from 44.8 in March, the bank said today in a statement. A reading above 50 indicates an expansion.
Foreign-Currency Pool
The news of China’s gains pushed regional equities higher. The MSCI Asia Pacific excluding Japan Index jumped 3.4 percent to 290.67 as of 10:48 a.m. in Hong Kong. South Korea’s Kospi climbed 1.6 percent. Japan is closed today for the Golden Week holidays.
Governments worldwide from the U.S. to Japan have been widening measures to ease the worst global recession since World War II.
The Association of Southeast Asian Nations, together with Japan, China and South Korea, said they will start a $120 billion foreign-currency reserve pool by the end of the year to help revive investor confidence. The pledge was agreed upon at a weekend meeting in Bali, Indonesia.
Brent crude oil for June settlement was at $53.20 a barrel, up 35 cents, at 2:12 p.m. Singapore time on London’s ICE Futures Europe exchange. The contract rose $2.05, or 4 percent, to $52.85 a barrel on May 1.
Daily oil output in Russia, the world’s second-largest producer, gained about 49,000 barrels in April, the nation’s Energy Ministry said May 2. Exports from Iraq, the only member of the Organization of Petroleum Exporting Countries not restricted by quota, may rise as much as 4 percent this month, according to the state-run oil marketing company.
Net-Short Position
Hedge-fund managers and other large speculators reversed from a net-short position to a net-long position in New York crude-oil futures in the week ended April 28, according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise, outnumbered short positions by 308 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Last week, traders were net-short 14,605 contracts.
