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NYMEX crude gains in Asia as focus swings to API estimates

Published 10/17/2016, 07:18 PM
Updated 10/17/2016, 07:19 PM
© Reuters.  NYMEX crude up in Asia
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Investing.com - Crude oil prices gained in Asia on Tuesday with industry data on U.S. inventories ahead expected to set the tone.

U.S. crude futures on the New York Mercantile Exchange for November delivery rose 0.40% to $50.14 a barrel.

The American Petroleum Institute will release its estimates of crude and refined product stockpiles in the U.S. at the end of last week late on Tuesday. The data will be followed on Wednesday with official figures from the U.S. Department of Energy.

Overnight, U.S. oil rose on Monday, and managed to stay above the $50 a barrel threshold as investors continued to eye the details of a planned output cut by the Organization of the Petroleum Exporting Countries.

On the ICE Futures Exchange in London, the December Brent contract gained 0.40% to trade at $52.18 a barrel.

The Organization of the Petroleum Exporting Countries reached an agreement to limit production to a range of 32.5 million to 33.0 million barrels per day in talks held on the sidelines of an energy conference in Algeria late last month.

However, market analysts remained skeptical of the deal, pondering how such a plan would be implemented.

The 14-member oil group said it won’t finalize details or complete its production agreement until the group’s next official meeting in Vienna on November 30.

Separately, crude prices came under some pressure as the U.S. dollar strengthened broadly after U.S. retail sales rose 0.6% in September, in line with expectations and after a revised 0.2% fall the previous month.

In addition, the U.S. producer price index rose 0.3% in September, compared to expectations for an increase of 0.2%.

The upbeat data added to expectations for an upcoming U.S. rate hike after the minutes of the Federal Reserve’s September policy meeting showed last week that several voting members believed a rate hike would be warranted "relatively soon" if the U.S. economy continued to strengthen.

Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.

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