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Forexpros – Crude oil futures moved higher in Asian trade Wednesday, after briefly falling below USD75 a barrel as a bleak outlook on the U.S. economy diminished prospects for increased demand from the world’s largest energy consumer.
On the New York Mercantile Exchange light, sweet crude futures for November delivery traded at USD78.06 a barrel during early Asian trade, adding 0.49%, after hitting a daily low of USD75.67.
Earlier Tuesday, crude futures sank to USD74.95, their lowest level since September of 2010.
U.S. Federal Reserve Chairman Ben Bernanke, earlier in the day, said the Fed may begin a new lending program to address a potential threat to the U.S. financial system if Europe’s debt crisis worsens.
“We would make sure we would stand ready to provide as much liquidity against collateral as needed as lender of last resort for our banking system,” Bernanke said during testimony with the Joint Economic Committee of Congress.
Bernanke added that the U.S. economic recovery was “close to faltering” and that legislators should refrain from fiscal policies that retard growth.
Elsewhere, finance officials from the European Union were reported studying ways to coordinate a recapitalization of regional financial institutions, conceding that not enough had been done to reassure investors that European banks would remain solvent.
Wall Street shares put together a late session rally on news from Europe, with the benchmark Dow Jones recovering from as much as 200 points lower.
The Dow Jones Industrial Average added 1.44%, the Nasdaq Composite Index rose 2.95%, and the S&P 500 was lifted 2.25%.
Global investor Goldman Sachs lowered its 2012 growth forecast for China to 8.6% from a previous estimate of 9.2%, citing “slowing external conditions and weak private residential investment.”
The International Energy Agency forecast that China, the world’s second biggest oil consumer, will account for approximately 40% of global oil demand growth in 2012.
A rising U.S. dollar minimized gains in oil futures, as dollar-denominated futures contracts tend to fall when the dollar rises.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, added 0.10% to 79.51.
On the ICE Futures Exchange Brent oil futures for November delivery lost 0.05% to trade at USD101.53.
The U.S. Energy Information Administration was due to release its weekly report on crude oil and gasoline inventories later Wednesday.
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