Energy Services
Client Login01924
Connect with us Follow us on Twitter Call us
Blog Header
Save Money


Save Time


More Information

Clear Analysis

More Control


  • November 30th, 2012

Oil Heads for First Monthly Gain Since August on Economic Growth

Amid signs of economic growth in the U.S. and China, the world’s biggest crude consumers, Oil headed for its first monthly gain since August in New York.

West Texas Intermediate futures were little changed after climbing 1.8 percent yesterday, the most since Nov. 19. Prices will probably be stable next week amid talks in Washington aimed at avoiding more than $600 billion in spending cuts and tax increases known as the fiscal cliff that are due to kick in next year, according to a survey. The U.S. economy expanded more than previously estimated last quarter, the Commerce Department said in Washington.

“What could initiate a rally is a resolution to the fiscal cliff. There will be a compromise reached and that could unleash a rally. I expect there’ll be a strong start to the year in the oil market” said a senior oil analyst.

Crude for January delivery was at $87.90 a barrel, down 17 cents, in electronic trading on the New York Mercantile Exchange at 9:02 a.m. London time. The contract increased $1.58 yesterday to $88.07. Prices are up 1.9 percent this month. WTI has lost 11 percent this year, the worst annual performance since 2008.

Brent for January settlement was down 33 cents at $110.44 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $22.56 to WTI, from $22.69 yesterday.

Economic Growth

Oil in New York rose yesterday after the revised figures from the Commerce Department showed U.S. gross domestic product grew at a 2.7 percent annual rate last quarter, up from a 2 percent prior estimate.

In a quarterly survey the proportion of respondents who see the Chinese economy improving or remaining stable surged to 72 percent from September’s 38 percent, according to the poll of investors, analysts and traders. Government data this month from retail sales to industrial production have shown China’s growth picking up after a seven-quarter slowdown.

Japan, the world’s third-biggest crude consumer, approved a second round of fiscal stimulus worth 880 billion yen ($10.7 billion) using budget reserves as Prime Minister Yoshihiko Noda attempts to boost the economy before elections on Dec. 16. Combined with a first round announced last month, the latest measures will increase Japan’s gross domestic product by about 0.4 percentage point, the Cabinet Office in Tokyo said today.

Middle East Tension

Oil surged earlier this month amid eight days of fighting between Israel and Hamas, which controls the Gaza Strip, before the two sides signed a Nov. 21 cease-fire agreement. Protests erupted in Egypt after President Mohamed Mursi issued a Nov. 22 decree that prevents his actions from being challenged by the courts.

The Middle East and North Africa accounted for about 40 percent of the world’s petroleum output last year, according to BP Plc (BP/)’s Statistical Review of World Energy.

Crude’s gains may falter after WTI failed to trade higher than the 50-day moving average, a sign of technical resistance, according to data compiled by Bloomberg. This indicator, at about $88.61 a barrel today, is where sell orders may be clustered.

The survey showed seven of 15 analysts and traders surveyed said prices would be little changed next week, five respondents estimated futures will rise and three projected a decline.

All Categories

News Archive