Forexpros – Crude oil futures posted gains in Asian trading on Tuesday on escalating tensions between Iran and Israel.
Ongoing talk that central banks around the world are preparing to stimulate their economies also boosted the commodity.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD92.83 a barrel on Tuesday, up 0.11%, on par with a session high of USD92.83 and up from an earlier session low of USD92.58.
Fears that Tehran is stepping up its plans to develop nuclear weapons prompted Israel to test a nationwide text-messaging system for warning its citizens of an imminent missile attack.
Concerns that the standoff between Israel and its western allies against Iran will reheat and spark supply concerns brought in the buyers on Tuesday.
Meanwhile, sluggish economic indicators fueled sentiment that central banks around the world will take steps to spur recovery via stimulus tools.
On Monday, Japan reported its gross domestic product grew less than expected in the second quarter, expanding 0.3% according to preliminary figures, below market forecasts for 0.6% and well below the first quarter’s rate of 1.2%.
Last week, China reported earlier that its trade surplus narrowed unexpectedly in July, dropping to USD25.1 billion from a USD31.7 billion surplus.
Economists were expecting a USD35.1 billion surplus.
China, also reported it was importing less oil.
Beijing’s General Administration of Customs reported the country’s net crude imports hit 21.6 million metric tons during July, or 5.1 million barrels a day, the lowest since December 2011.
Meanwhile in Europe, the European Central Bank on Thursday trimmed its forecast for economic growth to 0.6% in 2013, down from 1% previously.
The ECB also forecast a 0.3% contraction in growth this year, slightly worse than its previous forecast for a 0.2% contraction.
Federal Reserve officials have said they stand ready to intervene to stimulate the U.S. economy via quantitative easing, under which the Fed buys bonds held by banks, pumping liquidity into the economy and driving down interest rates to spark more sustained recovery.
Oil prices rise on such policy in that recession is averted and furthermore, the dollar weakens, making oil a nicely priced commodity in the eyes of investors wielding other currencies.
On the ICE Futures Exchange, Brent oil futures for September delivery were up 0.01% and trading at USD111.68 a barrel, up USD18.85from its U.S. counterpart.
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