Forexpros – Crude oil futures traded higher during U.S. afternoon trade Tuesday, on a stronger than expected ISM number despite trading lower earlier, following a conference call by the Group of Seven industrialized nations on the euro zone crisis.
On the New York Mercantile Exchange, light sweet crude futures for delivery in July traded at USD83.92 a barrel during U.S. afternoon trade, adding 0.15%.
It earlier rose by as much as 0.85% to trade at a two-day high of USD84.92 a barrel. Prices touched USD81.21 on Monday, the lowest since October 6, 2011.
Supporting crude price, the Institute of Supply Management said its non-manufacturing purchasing manager’s index inched up to 53.7 last month from a reading of 53.5 in April. Analysts had expected the index to remain unchanged.
Japan’s Finance Minister Jun Azumi said in a press conference following a Group of Seven teleconference that the G-7 would not issue a joint statement.
However, Azumi said that G7 members agreed to work together to deal with problems in Spain, while adding that officials did not discuss the possibility of a Greek exit from the euro.
Market sentiment had found support earlier amid hopes global policymakers will increase efforts to boost the world economy.
Traders now shift their attention to several monetary policy meetings later this week, including the European Central Bank on Wednesday and Bank of England on Thursday, for clues on their responses to weakening global growth.
There is some speculation by market analysts that the ECB could announce liquidity injections in to Europe’s troubled financial system. Other analysts expect the central bank to renew its suspended government bond-buying program.
In addition, Federal Reserve Chairman Ben Bernanke will testify on Thursday before a congressional committee about the state of the U.S. economy.
Oil traders were also looking ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fell for the first time in 10 weeks last week.
Markets expect the U.S. government report to show a 0.9 million barrel decline, due to lower imports.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Oil futures have been on a rapid decline since the start of May, as an escalating debt crisis in the euro zone and worries over a deeper-than-expected slowdown in Chinese economic activity dragged prices lower.
NYMEX oil prices have fallen more than 22% in the past five weeks, the largest five-week loss since the week to January 18, 2009. Prices are down almost 26% since hitting a March 1 intraday peak of USD110.53 a barrel.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for July delivery was down 0.3% to trade at 98.53 a barrel, with the spread between the Brent and crude contracts standing at USD14.61.
On Monday, prices fell to USD95.65 a barrel, the lowest since January 26, 2011.
London-traded Brent is down nearly 25% since hitting an intraday high of USD128.38 on March 1.
A potential loss of Iranian oil supplies has helped underpin strong gains in oil prices during late last year and the first quarter of this year.
However, revived talks between Iran and major powers over Tehran’s nuclear ambitions, along with rising Saudi Arabian and Libyan output and signs of slower U.S. economic and employment growth, helped pull oil prices back from first-quarter highs.
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