U.S. crude oil extended gains for a third straight day to end at a two-month high Tuesday, with investors opting for riskier assets after concerns of potential threats to supply from the Middle East emerged and the dollar trading lower. A fire at the Richmond refinery of Chevron Corp. (CVX) late Monday also added supply concerns as the unit accounts for about ten percent of U.S. West Cost refining capacities.
The fire at the Chevron refinery which has a capacity of nearly 245,000 barrels a day has been put out, but reports say the unit could be out of production for several months. The fire began at about 6.15 p.m. after a series of explosions with thick black smoke spewing over the San Francisco Bay area.
Light Sweet Crude Oil futures for September delivery gained $1.21 or 1.6 percent to close at $93.67 a barrel on the New York Mercantile Exchange Tuesday.
Crude prices scaled a high of $94.42 a barrel intraday and a low of $91.78.
Yesterday, oil settled higher following some better-than-expected U.S. jobs data end last week. Nonetheless, investor hopes for further monetary stimulus strengthened with an increase in U.S. unemployment rate, notwithstanding the positive jobs data reported last Friday.
The euro traded higher against the dollar at $1.2419 on Tuesday, as compared to $1.2400 late Monday in North America. The euro scaled a high of $1.2441 intraday and a low of $1.2376.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.125 on Tuesday, down from from 82.186 in North American trade late Monday. The dollar scaled a high of 82.40 intraday and a low of 82.04.
In economic news from the eurozone, German manufacturing orders declined more than expected in June, data from the Federal Ministry of Economy and Technology showed. Factory orders fell 1.7 percent month-on-month in June, while analysts expected orders to drop 0.8 percent. In May, orders recorded a 0.7 percent increase.
Meanwhile, production in the British industrial sector shrunk notably in June due mainly to extra holidays related to the Queen's Diamond Jubilee celebrations, data from the Office for National Statistics showed.
Later today, the American Petroleum Institute will release its U.S. crude oil inventories report for the week ended August 3. Also in focus will be the Energy Information Administration weekly crude inventories report due Wednesday.
by RTT Staff Writer
For comments and feedback: editorial@rttnews.com
Market Analysis