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Oil lingers above $54 on economic recovery hopes

Oil lingers above $54 on economic recovery hopes

Oil prices lingered above $54 a barrel Tuesday as growing investor optimism about a recovery in the global economy supported prices above a month-long trading range.
Benchmark crude for June delivery was down 3 cents at $54.46 a barrel by noon in European electronic trading on the New York Mercantile Exchange after rising $1.27 on Monday to settle at $54.47.
Oil has traded near $50 for more than a month as the worst global slump in decades undermined crude demand. But recent positive economic signs have investors looking for a recovery.
Pending U.S. home sales rose more than forecast on Monday and had their second straight monthly gain, while construction spending rose unexpectedly in March after five straight declines.
China said on Friday a monthly survey of purchasing managers for more than 700 manufacturers rose in April from March. Global stocks soared on investor optimism, with the Standard & Poor's 500 index rising 3.4 percent on Monday, after benchmarks in Hong Kong and India both surged more than 5 percent.
"The overall market sentiment is positive so I won't be surprised if oil goes above $55 in the short term," said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore. "But I haven't seen enough good data to convince me that the global economy is on its way back up, or that oil is going straight to $75."
Trader and analyst Stephen Schork suggested markets were now at a crucial point of departure.
Crude oil markets in London and New York are now flirting with ... pivot ranges in the mid $50s," he wrote in his Schork Report. "Bears must defend this area. Failure to do so sets the table for a run at $60.
Traders will be watching the weekly petroleum inventory data for the week ended May 1 from the Energy Information Agency on Wednesday. Analysts expect a build of 2.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Crude stocks rose 4.1 million barrels last week and are near 19-year highs.
The global outbreak of swine flu could also weigh on oil prices. Authorities shut down Mexico City for most of the last week in a bid to slow the spread of the virus, which has infected more than 1,000 people across the globe.
"If that happens in New York City, or elsewhere in the U.S., it would really put a dent in the economy," Chu said. "So far, it doesn't seem to be a big deal, but a second wave could be deadlier."
In other Nymex trading, gasoline and heating oil for June delivery were flat at $1.59 a gallon and $1.44 a gallon. Natural gas for June delivery dropped by nearly 5 pennies to $3.66 per 1,000 cubic feet.
In London, Brent prices gained a cent to $54.62 a barrel on the ICE Futures exchange.
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Associated Press writer Alex Kennedy contributed to this report from Singapore.


Updated : 2021-03-01 22:42 GMT+08:00