BLBG: Crude Oil Rises From Lowest in a Month Before U.S. Manufacturing Report
Crude oil traded near its lowest level in a month in New York as retreating equities reinforced concern that the recovery will not be strong enough to revive fuel demand.
Futures had gained as much as 0.7 percent before a U.S. report forecast to show that manufacturing expanded in the world’s biggest energy user. Hedge-fund managers and other large speculators increased their net-long position in New York crude- oil futures in the week ended Aug. 10. Crude gave up its gains as European stocks reversed on losses among utilities and telecommunications companies.
“The question is whether we’re seeing a genuine recovery that will lead prices above $80 or just a corrective rebound,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “The stuttering economic recovery will ensure that rallies will only go so far, and I expect we’ll see sideways trading between $75 and $78 this week.”
Crude oil for September delivery traded for $75.55 a barrel, 16 cents higher, in electronic trading on the New York Mercantile Exchange as of 9:31 a.m. London time, after climbing to $75.95. Brent crude for September was at $75.14 a barrel, up 3 cents on the London-based ICE Futures Europe Exchange.
The Stoxx Europe 600 Index fell 0.2 percent to 254.95 at 9:11 a.m. in London, after rising as much as 0.6 percent.
Commodities demand from emerging markets and limited growth in supplies will help to support prices toward the end of the year, according to Goldman Sachs Group Inc., which backed oil, gold, copper, zinc and platinum.
‘Overweight’ Commodities Recommendation
Goldman Sachs reiterated an “overweight” recommendation on commodities, analysts led by Allison Nathan and Jeffrey Currie wrote in an Aug. 13 report. Goldman pared its 12-month forecast for gains in the S&P GSCI Enhanced Total Returns Index to 19 percent from 21.6 after recent gains in agricultural commodities and metals.
Speculative long positions, or bets that crude oil prices will rise, by hedge funds and other large traders outnumbered short positions by 60,336 contracts on the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 4,658 contracts, or 8 percent, from a week earlier.
