💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

U.S. crude rebounds from 1-mth low on debt deal approval

Published 08/01/2011, 10:12 PM
Updated 08/01/2011, 10:16 PM
BP
-
SOGN
-
CL
-
TAHS
-

* U.S. Senate expected to approve debt deal on Tuesday

* U.S. crude to fall below $90 -technicals

* Coming Up: U.S. API weekly oil inventories; 2030 GMT

By Alejandro Barbajosa

SINGAPORE, Aug 2 (Reuters) - U.S. crude rebounded from a one-month low on Tuesday, after the House of Representatives passed a deal to raise the debt ceiling of top oil consumer the United States, restoring some optimism to markets battered by disappointing economic data.

West Texas Intermediate crude , the U.S. benchmark, gained 29 cents to $95.18 a barrel by 0200 GMT after trading as low as $93.42 on Monday, its lowest since late June, on news that global manufacturing expanded at its weakest pace in two years last month. Brent gained 10 cents to $116.91.

The focus now turns to the Senate, where the $2.1 trillion deficit-cutting plan is expected to be approved in a vote on Tuesday, the deadline to lift the debt limit.

"It's a good compromise," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong, adding, "U.S. policy is moving in the right direction.

"It is cutting back on the fiscal stimulus, but there is still enough ammunition for the Fed to keep growth going for the remainder of the year. The market is going to be thinking about the fundamental side of the economy, as well as what is going on in Washington, so it should be volatile."

The U.S. Institute for Supply Management manufacturing report, a gauge of factory activity in the world's largest economy, fell to 50.9 in July, its lowest since July 2009.

Brent crude edged higher on Monday as North Sea oilfield maintenance and violence in the Middle East offset the weaker global factory data.

BP said the North Sea Forties Pipeline System would be closed for five days this week to allow workers to remove an unexploded mine from World War II discovered in water near the pipeline.

France's Total shut its North Sea Elgin platform, which pumps 104,000 barrels per day of condensate, for summer maintenance, the company said, without disclosing the duration.

RISING STOCKPILES

U.S. crude oil inventories probably rose by 1.2 million barrels last week as increased supplies from the Strategic Petroleum Reserve offset losses due to Tropical Storm Don, a Reuters poll showed on Monday.

Gasoline stockpiles were projected unchanged for the week, the poll showed, while distillate stocks were expected to have risen 1.5 million barrels.

Industry data on inventories from the American Petroleum Institute (API) will be published on Tuesday, followed by government statistics from the Energy Information Administration on Wednesday.

Tropical Storm Emily formed near the Caribbean's Lesser Antilles islands on Monday, far from oil and gas-production facilities in the U.S. Gulf of Mexico.

In other markets, Asian shares fell on Tuesday on concerns about a downgrade of the United States credit rating and economic worries after the sluggish manufacturing data, while the yen gave up some gains on jitters over the possibility of intervention by the Bank of Japan.

The safe-haven Swiss franc counted its gains on worries about the global economy even as the U.S. looked to have averted a debt default. (Editing by Clarence Fernandez)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.