Trade Resources Industry Views NYMEX July Crude Settled $1.48 Higher at $93.45/barrel Monday

NYMEX July Crude Settled $1.48 Higher at $93.45/barrel Monday

NYMEX July crude settled $1.48 higher at $93.45/barrel Monday, largely holding to overnight gains following better-than-expected eurozone manufacturing data.

Weak US manufacturing data put downward pressure on the US dollar, which provided added support to crude and product futures.

ICE July Brent crude settled $1.67 up at $102.06/b, and found support in a production shut-in of Nexen's 220,000 b/d North Sea Buzzard oil field over the weekend.

Several North Sea crude oil traders said the outage had only a minor impact on the market, partly due to what had been a lack of information on the expected duration. But, production is expected to return by the middle of the week, Nexen said Monday.

The strength in Brent in turn boosted US products. NYMEX July ULSD settled 5.20 cents higher at $2.8334/gal. July RBOB settled up 3.02 cents at $2.7851/gal.

"The weak ISM data put the dollar under a lot of pressure," Tradition Energy analyst Gene McGillian said. "And this put a bid in the market for crude."

"We can't seem to drop below the $92/b level before we start to turn higher," he added. "The shorts pile up, and we lose momentum as we get near $94."

ISM manufacturing data US activity moved into contraction in May, largely on slower government spending, AFP reported. The ISM purchasing managers index dropped to 49 from 50.7 in April. The 50 level represents the division between contraction and expansion in manufacturing activity.

While bearish in nature, the weak reading sent the US Dollar Index tumbling, from 83.38 at the start of the session to a low of 82.43 during late-afternoon US trading. The index was 82.56 around the time of the NYMEX settle.

The Chinese manufacturing purchasing managers' index was largely bearish as well. The HSBC "flash" PMI came in at 49.20, slightly below economists expectations.

But crude and products largely held strong to overnight gains following strong eurozone manufacturing figures released ahead of the US trading day.

"Stronger than expected Euro Zone PMI data represented both the hope of increased fuel demand and a boost for the euro, both supportive factors for oil priced in US dollars," Citi Futures Perspectives energy analyst Tim Evans said in a note.

"It could be nothing more than a really oversold market," Oil Outlooks President Carl Larry said. "I think the big picture involves people expecting to see the first big draw [in US commercial crude stocks] of the season."

Strength in NYMEX products was likely equal parts following Brent higher due to the Buzzard outage and a weaker-than-normal Friday that saw product futures drop, according to Phyllis Nystrom, energy analyst at CHS Hedging.

"With the ISM and the eurozone PMI, it's really a matter of which one are you going to follow," Nystrom said.

 

Source: http://news.chemnet.com/Chemical-News/detail-1972734.html
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Oil Complex Settles Higher on Eurozone PMI, Weak Us Dollar
Topics: Chemicals