Crude trades near a five-week high as Cyprus secured 10 billion euros ($13 billion) of rescue loans that would help the nation avoid a default, improving the outlook of the euro-zone’s economy and brightening the prospects for oil demand.
But comments by Eurogroup Head Jeroen Dijsselbloem who said that Cyprus could provide the framework for resolving future euro zone banking crises might limit gains as analysts believe the remark implies the private sector may bear heavier losses in the future.
Also limiting gains today is the U.S. inventories report. Crude stockpiles are expected to increase by 1.4 million barrels to 384.1 million last week, the highest since June, according to the Energy Information Administration (EIA) report tomorrow.
The market’s been watching the U.S. reserves quite closely, which have been climbing somewhat, as domestic production has been coming on stream and demand has remained relatively flat, said David Lennox from Fat Prophets, Sydney.
USD Supports oil
However, the weakening U.S. dollar is giving support to oil prices on Tuesday, as it makes oil less expensive and more attractive. The dollar index fell to 82.75 while the euro is rising today trading around the 1.2878.
- Crude oil is trading around the $95.00 a barrel level compared with the opening at $94.76, while the highest is at $94.98 and the lowest is at $94.66
- Brent is trading around $108.14 a barrel after falling 0.03% or $0.03
Investors are eyeing this week key U.S. data for more clues over oil demand in the world’s biggest oil consumer. The U.S. will release today the durable goods orders, consumer confidence, housing data and the American Petroleum Institute (API) inventory numbers.
Saudi Arabia`s oil minister said on Monday that oil prices at around $100 a barrel are reasonable for both consumers and producers. The comments come as a response to ally Kuwait that said “current oil price is fair”.
- Natural gas is trading at $3.892 per cubic feet after rising 0.70%
- Heating oil is trading at $2.8703 a gallon after falling 0.24%
- Gasoline is trading at $3.061 a gallon after falling 0.05%