RTRS:OIL FUTURES: Crude Holds Gains In Asia; EIA Data In Focus
Of DOW JONES NEWSWIRES
TOKYO (Dow Jones)--Crude-oil futures kept a recovery that began overnight in the U.S. alive, tracking a broad recovery in Asian share prices.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at $81.39 a barrel at 0529 GMT, up $2.09, or 2.6%, in the Globex electronic session. September Brent crude on London's ICE Futures exchange rose $2.29, or 2.2%, to $104.86 a barrel.
Equity and commodity markets haven't necessarily shrugged off concerns that another recession is looming, however.
"The [crude] rally has mostly come from short covering. Whether it goes up again is a different story," said Koichiro Kamei, an analyst at the Market Strategy Institute.
Kamei said that traders will keep a close eye on weekly U.S. oil inventory data by the Energy Information Administration due at 1430 GMT for physical demand cues.
Late Tuesday, data from the American Petroleum Institute, an industry group, showed U.S. crude stockpiles fell by 5.2 million barrels last week. If the more closely watched EIA inventory report is in line with API's data, market sentiment will improve, analysts said.
The International Energy Agency will also be issuing its market report for August, due at 0800 GMT, which investors will also keep an eye on--to pick up cues on global demand.
Nevertheless, concerns over U.S. and European economies are lingering. "With turmoil surrounding U.S. and European debt, disappointing macro data and leading indicators suggest further deterioration ahead," Bank of America Merrill Lynch said in a report.
"Even if crude prices extend gains today [if the EIA report is bullish], it wouldn't mean much for the [long-term] crude price outlook," Daiichi Shohin analyst Koichi Murakami said. "Another bleak economic indicator would send crude prices lower."
Nomura Securities economist Tatsufumi Okoshi said in a report, "There still is a possibility that Nymex front-month crude will fall below $40." He tipped near-term support around $70.
Nymex reformulated gasoline blendstock for September--the benchmark gasoline contract--rose 536 points to $2.7212 a gallon, while September heating oil traded at $2.8202, 554 points higher.
ICE gasoil for August changed hands at $888.00 a metric ton, up $1.75 from Tuesday's settlement.
-By Mari Iwata, Dow Jones Newswires; 813-6269-2798; mari.iwata@dowjones.com
