Crude hovers near 3-week high as U.S. demand concerns ease

Published 07/07/2011, 04:26 AM
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Investing.com – Crude oil futures edged higher on Thursday, hovering near a three-week high as concerns over a slowdown in U.S. demand eased after industry data showed a larger-than-expected declines in U.S. crude inventories.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at USD97.42 a barrel during European morning trade, jumping 0.8%.       

It earlier rose as much as 1% to trade at a daily high of USD97.62 a barrel, hovering near Wednesday’s three-week high of USD97.76.

The American Petroleum Institute, an industry group said in a report on Wednesday that U.S. crude inventories fell by 3.2 million barrels last week, exceeding expectations for a 2.3 million barrel decline. 

Stocks of gasoline declined by 1.9 million barrels, confounding expectations for a 0.1 million barrel increase.

The U.S. Energy Department was to release its closely-watched crude oil inventories report for the week ended July 1 later in the day.

The data was expected to show that U.S. crude oil stockpiles declined by 2.5 million barrels, the longest streak of withdrawals since January, while gasoline supplies were forecast to rise by 0.8 million barrels.

U.S. oil supplies have declined nearly 3.8% since the end of May amid U.S. peak gasoline demand and the start of the Atlantic hurricane season.

Gains were limited amid concerns over a slowdown in future demand from China, after the nation’s central bank raised its benchmark interest rate by 0.25% to 6.56% on Wednesday, the third rate increase this year and its fifth rate hike in the latest round of monetary tightening.
 
China is the world's second largest oil consumer after the U.S., with the International Energy Agency forecasting that the country will account for approximately 40% of global oil demand growth in 2012.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery gained 0.55% to trade at USD114.51 a barrel, up USD17.09 on its U.S. counterpart.

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