Oil rose for a third day in New York as speculation that economic growth will boost fuel demand in the U.S. and China, the world’s biggest crude consumers, countered concern Europe’s debt crisis will worsen.
Futures advanced as much as 1.2 percent from the close on May 25. U.S. consumer confidence probably gained in May and job growth may have picked up, according to surveys by Bloomberg News before reports this week. China’s cabinet agreed to revive financial incentives for consumers to trade in their passenger cars to help increase demand in the world’s biggest vehicle market, a government official said yesterday. Oil has slipped 13 percent this month amid concern Europe’s debt crisis will derail the global economic recovery.
“There’s little green shoots of optimism,” Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity- markets newsletter in Sydney, said in a telephone interview today. “We’re going to get a robust story out of the U.S. We’re not out of hot water with Europe.”
Crude for July delivery climbed as much as $1.13 to $91.99 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.36 at 2:08 p.m. Singapore time. Floor trading was closed yesterday for the U.S. Memorial Day holiday and transactions will be booked with today’s trades for settlement purposes. Front-month prices are down 7.6 percent this year.
Brent oil for July settlement was at $107.35 a barrel, up 24 cents, on the London-based ICE Futures Europe exchange. Prices have fallen 10 percent in May. The European benchmark contract’s premium to West Texas Intermediate was at $16.01, from $16.12 yesterday.
Oil is paring its monthly decline after rebounding from long-term technical support at $89.83 a barrel, according to data compiled by Bloomberg. On the weekly chart, that’s the 50 percent Fibonacci retracement of the drop to $32.40 in December 2008 from an intraday record high of $147.27 in July that year. Buy orders tend to be clustered near chart-support levels.
China’s cabinet approved a so-called cash-for-clunkers program last week, according to the official, who asked not to be identified because the matter hasn’t been made public. The nation rolled out a similar incentive plan in 2009 to counter the global financial crisis, spurring 49.6 billion yuan ($7.8 billion) in new car purchases the following year.
The New York-based Conference Board’s gauge of consumer confidence probably rose to 69.5 in May from 69.2 the previous month, according to a Bloomberg survey before a report tomorrow. U.S. payrolls increased by 150,000 workers after a gain of 115,000 in April that was the lowest in six months, according to the median forecast of 70 economists in a separate survey before Labor Department figures on June 1.
The jobless rate in Japan rose for the first time in three months in April, data from the statistics bureau in Tokyo showed today. The number exceeded analysts’ estimates and underscored concern that an economic recovery will lose momentum in the face of Europe’s crisis. The rate increased to 4.6 percent from 4.5 percent in March. The median estimate of 26 economists surveyed by Bloomberg News was for 4.5 percent.
Japan was the world’s third-biggest crude user in 2010, according to BP Plc (BP/)’s Statistical Review of World Energy.
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