Despite the signs of recovery from the U.S. economy, the fast rise in China’s inflation kept investor optimism in check and triggered demand worries. A firmer U.S. dollar is also weighing on oil prices.
Claims for jobless benefits last week dropped to the lowest since January 2008, the U.S. Labor Department said yesterday, underlining the resilience shown last week by the strong employment report.
But the fast rise in China’s inflation is keeping investor optimism in check. The rising inflationary pressures in the world’s second largest oil consumer may determine authorities to stop the easing measures and take actions to steam inflation.
A firmer U.S. dollar is also weighing on prices. Europe`s prolonged debt crisis and the uncertainties over China`s growth is increasing demand on the safe haven greenback; meanwhile, caution is rising ahead of a G7 meeting in UK on Friday.
- Crude oil is trading around the $95.90 a barrel level compared with the opening at $96.12, while the highest is at $96.22 and the lowest is at $95.73
- Brent is trading around $104.12 a barrel after falling 0.34% or $0.35
The dollar index is trading at 93.00 as of this writing; oil prices tend to move inversely against the dollar as it reduces the appeal of the dollar dominated commodities.
Oil prices however might find support from the rising tensions in the Middle East. “Hezbollah leader Hassan Nasrallah said Syria will respond to Israeli raids around Damascus by giving his group more sophisticated new weapons”, CNBC reported.
Meanwhile, Iraq restored crude exports yesterday to Turkey after repairing a pipeline in the northern city of Mosul which was damaged due to a bombing. The pipeline has an average flow of 335,000 barrels a day.
- Natural gas is trading at $3.944 per cubic feet after falling 0.98%
- Gasoline is trading at $2.8783 a gallon after falling 0.24%
- Heating oil is trading at $2.9232 a gallon after falling 0.46%