Oil edged up above $64 a barrel on Tuesday, after four consecutive days of falls on worries about the economy that have brought the stock market rally to a halt and pushed the dollar higher.
The market could find more direction from the American Petroleum Institute’s weekly crude and products stocks data to be released at 8.30 this evening, and are expected to show a fall in crude and a rise in product stocks.
US light sweet crude for August is trading at $64.26 a barrel, whilst London Brent Crude is trading around $64.28.
When risk aversion rises, investors cut holdings of stocks and higher-yielding currencies and often buy back yen and U.S. dollars that were used to finance the trades.
Oil prices have fallen 8% since the beginning of July after having doubled from lows below $33 hit last December on economic optimism in the second quarter that has since fizzled out.
Growing unrest in Nigeria, where militants have launched at least four attacks against oil installations in the past ten days, put a floor on falling prices in the past few weeks. However it failed to push prices higher on Monday when the main militant group said it had attacked an oil facility and seized a chemical tanker and six crew members.
The Energy Information Administration (EIA) will also release its monthly report later on Tuesday. Last month, the EIA raised its forecast for 2009 world demand by 10,000 barrels per day (bpd) to83.68 million bpd, the first time since September that it had increased the demand estimate in its rolling monthly forecast.
UK and European markets have started the day flat, and U.S. markets are currently pointing to a slightly negative opening when their markets open this afternoon.
Sources: Reuters: BBC: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times:
Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia:
Please note this report provides a guide to some of the relevant areas that individual investors should consider discussing with an authorised adviser in relation to their specific circumstances, it does not constitute individual advice. As a result no action should be taken or refrained from being taken as a result of its content.
