OIL FUTURES: Crude Slightly Higher, Boosted By Equities: 9/8/2010 11:50:57 AM
By Jerry A. DiColo
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Crude futures aimed higher Wednesday as investors returned to equities and other riskier assets on subsiding concerns about the global economy. Light, sweet crude for October delivery recently traded 47 cents higher at $74.57 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 21 cents higher at $77.97 a barrel. Oil prices had fallen for the past two sessions, slumping amid concerns about a glut of oil in the U.S. and a sluggish economic recovery that shows no signs of reducing the high supplies. After starting Wednesday in the red, futures gained some traction with the help of the U.S. stock market, which has led oil in recent months as a proxy for future economic growth. The Dow Jones Industrial Average was recently up 65 points to 10406. "We've been in a fairly narrow range here over the last 10 trading days, and I think the market is awaiting some further impetus that will break us out one way or the other," said Andy Lebow, an oil analyst with MF Global. "If the equity markets can sustain some momentum, that will help." Economic data last week provided some modest optimism on future oil demand as a report on U.S. manufacturing showed continued growth and the monthly jobs report was better than anticipated. But new worries about the strength of Europe's financial system cropped up this week after a Wall Street Journal analysis of the problems with stress tests on European banks. Meanwhile, commercial stocks of oil and fuel products remain at 27-year highs, and data due 10:30 a.m. EDT Thursday from the Department of Energy is expected to show a further build. The department's Energy Information Administration is expected to report crude inventories rose by 300,000 barrels in the week ended Sept. 3, according to a survey by Dow Jones Newswires. Gasoline stocks are expected to show a modest 600,000-barrel drop, while distillates, which include heating oil and diesel fuel, are seen rising by 400,000 barrels. High supplies and an uncertain economic outlook have kept crude prices from pushing above the recent trading range between roughly $70 and $80 a barrel. But traders are wary of moving much lower either, particularly amid an Atlantic hurricane season that could quickly reduce stockpiles should a storm affect Gulf of Mexico oil producers. "The market is building up energy to make an assault on either side of the range," said Gene McGillian, a broker and analyst with Tradition Energy. "The signals from the economy are going to give us a better idea of what side it's going to come down on... but until we see signs these record inventories we have are pared back, I'm more inclined to think we have more of a chance of testing the downside." Front-month October reformulated gasoline blendstock, or RBOB, recently traded 0.96 cents, or 0.5%, higher at $1.9425 a gallon. October heating oil recently traded 0.50 cents higher at $2.0793 a gallon. -By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155; jerry.dicolo@dowjones.com. (END) Dow Jones NewswiresSeptember 08, 2010 11:50 ET (15:50 GMT)
