BLBG:Oil Trades Near One-Week High on Outlook for Stimulus
Oil traded near the highest level in a week amid speculation that countries from the U.S. to China will add economic stimulus, countering signs of a slowdown that threatens fuel demand.
Futures were little changed in New York. The U.S., the world’s biggest oil user, holds a Federal Reserve meeting to discuss monetary policy this week after the European Central Bank last week agreed on bond purchases to ease the euro-area’s debt crisis. Net crude imports last month by China, the second- biggest consumer of the commodity, slid to the lowest level in almost two years amid slowing global demand for the nation’s goods, government figures showed today.
“The economy is weak,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “The stimulus plans are designed to placate the market rather than improve the economies. You are putting in fire-power just to stop things falling.”
Oil for October delivery was at $96.34 a barrel, down 8 cents, in electronic trading on the New York Mercantile Exchange at 1:30 p.m. Singapore time. The contract climbed 89 cents, or 0.9 percent, to $96.42 on Sept. 7, the highest close since Aug. 31. Front-month prices are 2.5 percent lower this year.
Brent oil for October settlement climbed 20 cents to $114.45 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate was at $18.11, from $17.83 on Sept. 7.
China Slowdown
Oil in New York has technical support along the middle Bollinger Band on the daily chart, around $94.08 a barrel today, according to data compiled by Bloomberg. Buy orders tend to be clustered near chart-support levels.
China imported a net 18.2 million metric tons of crude in August, or 4.3 million barrels a day, according to data published today on the website of the Beijing-based General Administration of Customs. That’s down 13 percent from a year earlier and the lowest level since October 2010. The nation’s exports of goods rose 2.7 percent, missing the 2.9 percent forecast in a Bloomberg News survey, the data showed. Industrial output increased at the slowest pace in three years last month, the government said yesterday.
Specific measures to support and stabilize foreign trade will be announced soon, according to an interview with Commerce Minister Chen Deming broadcast yesterday by China Central Television. The nation’s economic expansion faces “notable downward pressure,” President Hu Jintao said Sept. 8 at the Asia-Pacific Economic Cooperation CEO Summit in Vladivostok, Russia.
Fund Bets
Japan’s gross domestic product grew an annualized 0.7 percent in the three months through June, the Cabinet Office said in Tokyo today, less than a preliminary calculation of 1.4 percent. The median forecast of 26 economists surveyed by Bloomberg News was for a revised 1 percent gain.
“The economy is the key thing that people are watching,” Robin Mills, the head of consulting at Dubai-based Manaar Energy Consulting and Project Management, said by telephone Sept. 9. “There’s some optimism about developments in the euro zone last week, though markets are more concerned about what looks like could be a slowdown in the economy in China.”
Money managers raised net-long positions in WTI by 1,153, or 0.6 percent, to 193,624 futures and options combined in the seven days ended Sept. 4, according to the Commodity Futures Trading Commission’s Commitments of Traders report on Sept. 7.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Mike Anderson at manderson34@bloomberg.net
