Crude oil held to most of Friday’s gains amonsgt easing fears that the U.S. Federal Reserve would wind down its stimulus program early. In China, data indicated the world`s second-biggest economy expanded in line with expectations, easing worries over demand.
Last week, Fed Chairman Ben Bernanke gave assurances that policymakers should await more signs of improvement from the job market before starting to reduce stimulus. This is keeping the U.S. dollar weaker, increasing the appeal of the dollar dominated commodities.
- Crude is trading around $105.57 a barrel after falling $0.38
- Brent is trading around $108.68 a barrel after falling $0.13
Meanwhile, the sustained growth in China improved the outlook for oil demand. The economy expanded by 7.5% in the second quarter from a year earlier, matching estimates. Yet as the industrial output numbers were weak, the downside risks to growth continue.
China’s weakening industrial data may keep gains limited, yet the continued tensions in the Middle East and Egypt may add to the upside pressures on oil prices. While Iran’s nuclear program is back in the picture, investors are watching the regime change in Egypt.
Markets will be watching today the U.S. retail sales and the manufacturing activity in New York, while the earnings season continues in the U.S. with Citigroup, Coca-Cola, Goldman Sachs, Bank of America, IBM, Google, Microsoft, Morgan Stanley and GE set for this week.
- Natural gas is trading at $3.681 per cubic feet after rising 1.02%
- Gasoline is trading at $3.1041 a gallon after falling 0.43%
- Heating oil is trading at $3.0292 a gallon after falling 0.01%