U.S. crude oil futures ended at six-week high Tuesday, on supply concerns as Iran stepped up its rhetoric over the Strait of Hormuz, while continuing its missile drills in the area. In response, reports say the U.S. has started reinforcing its military in the area after speculations that Iran may force a shut down of the critical waterway.
Oil prices were also helped by increased risk-taking sentiment, with investors anticipating additional stimulus measures to help boost growth from the European Central Bank and other central banks. The expectations follows a slew of weak global economic data recently.
Light Sweet Crude Oil futures for August delivery, jumped $3.91 or 4.7 percent to close at $87.66 a barrel on the New York Mercantile Exchange Tuesday.
Crude prices scaled a high of $88.04 a barrel intraday and a low of $83.33.
Oil prices pared gains following some weak manufacturing data from the U.S., coupled with some soft numbers out of Europe and China. The dollar made gains against most major currencies, while the euro dipped.
The euro traded higher against the dollar at $1.2612 on Tuesday, as compared to $1.2583 late Monday in North America. The euro scaled a high of $1.2626 intraday and a low of 1.2560.
The dollar index, which tracks the U.S. unit against six major currencies, was trading at 81.775 on Tuesday, down from 81.888 in North American trade late Monday. The dollar scaled a high of 82.03 intraday and a low of 81.70.
In economic news, the U.S factory orders posted a stronger than expected rebound in May buoyed by orders of ships, boats and aircraft, according to the Commerce Department. New orders for manufactured goods up $3.3 billion, a 0.7 percent increase that partially reverses two consecutive months of declines. Economists estimated 0.1 percent increase in orders for factory goods following a 0.6 percent drop in the previous month.
Elsewhere, eurozone producer prices fell 0.5 percent month-on-month in May, data released by Eurostat. On an annual basis, the price index gained 2.3 percent compared to expectations for a 2.5 percent rise.
Meanwhile, consumer price inflation in the Organization for Economic Cooperation and Development (OECD) area slowed for the third consecutive month in May, latest data showed. The consumer price index increased 2.1 percent on an annual basis in May, after growing 2.5 percent in the previous month. In March and February, inflation rates were 2.7 percent and 2.8 percent respectively.
by RTT Staff Writer
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