Oil steady at $58, eyes Chinese economic data

Oil steady at $58, eyes Chinese economic data
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First Published: Mon, May 11 2009. 08 51 AM IST
Updated: Mon, May 11 2009. 08 51 AM IST
Peth: Oil steadied at near a 6-month high of above $58 a barrel on Monday, keeping most of the previous session’s gains, on hopes that energy demand would rebound alongside a global economy recovery.
Oil rose more than 3% on Friday to touch a near six-month high as economic data showed fewer-than-expected jobs were lost in April and stress test results lifted some uncertainty over the health of major American banks.
US crude slipped 18 cents to $58.45 a barrel by 6:25am, The contract rose $1.92 to settle at $58.63 on Friday.
London Brent crude fell 10 cents to $58.04.
“Oil prices are driven by perceptions that the economic outlook is less pessimistic that previously thought. But the growth numbers we could be seeing from developed economies may not justify such price levels,” said David Moore, a commodities strategist at Commonwealth Bank of Australia.
Traders will be eyeing China’s economic data, including the consumer price index and producer price index, due out later on Monday to gauge how the world’s third-largest economy is faring, analysts said.
Oil, which has plummeted from a record of over $147 a barrel in July, has risen over the past three months on hopes that the economic recession may be easing.
A strong rally in equities markets, which saw the Nasdaq cap its longest stretch of weekly gains in a decade on Friday, has also helped oil prices gain over 14% so far this month and 10% last week.
The US economy is expected to begin growing in the second half of this year, while the jobless rate is expected to peak in the first quarter of 2010, according to a survey of top forecasters released on Sunday.
US employers cut 539,000 jobs last month, the fewest since October, signalling the economy’s steep decline might be easing and giving the stock market a boost.
“The steady upward trend in oil’s trading range and the current dynamic is likely to be sufficient to stay Opec’s hand at the next meeting,” Barclays Capital said in a research note on Friday.
Opec is not expected to cut output in its coming meeting on 28 May for political reasons, a Kuwaiti oil official said in remarks published on Sunday.
Analysts said a rebound in the US dollar, which fell to a four-month low on Friday, also posed as a downside risk for oil.
Crude oil speculators on the New York Mercantile Exchange shifted to a net short position in the week to 5 May, according to data from the US Commodity Futures Trading Commission released on Friday.
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First Published: Mon, May 11 2009. 08 51 AM IST
More Topics: Oil | Commodity | Money | Crude | Opec |