U.S. crude oil ended higher Monday, after China moved to prop up its economy and with stockpiles at Cushing delivery point dwindling. Nonetheless, gains were trimmed as Saudi Arabia again refrained from curbing production despite massive global stockpiles.
News reports said inventories at Cushing in Oklahoma, the delivery point for U.S. crude, ended last week with a build up of just 0.35 million barrels. Saudi Arabia and OPEC have stubbornly kept output at record highs, hoping a price war could push North American shale producers out of the market.
Meanwhile, in a bid to shore up its economy, China’s central bank over the week end slashed its reserve requirement ratio for banks, or the amount of deposits banks require to hold as reserves, to 18.5% from 19.5%. China’s economy grew at the slowest pace in six years during the fourth quarter.
Investors also weighed the developments in Greece, with increasing concerns that Greek banks may soon run out of collateral to access European Central Bank refinancing. The situation is inevitable unless Athens reaches a deal over the release of another 7.2 billion euros in bailout funds from the European Union. A meeting of euro-area finance ministers will be held in Latvia on April 24.
Meanwhile, Greek finance minister Yanis Varoufakis is reported to have warned of contagion if Greece leaves the eurozone. However, European Central Bank President Mario Draghi brushed aside such speculations, stating that the single eurozone currency is irrevocable.
Light Sweet Crude Oil futures for May delivery, the most actively traded contract, gained $0.64 or 1.2 percent, to settle at $56.38 a barrel on the New York Mercantile Exchange Monday. The May contract expires on Tuesday.
Crude prices for May delivery scaled a high of $57.17 a barrel intraday and a low of $54.85.
On Thursday, crude oil dropped $0.97 or 1.7 percent, to settle at $55.74 a barrel, on concerns over a potential Greek debt repayment default and an equity market regulatory change in China.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.97 on Monday, up from its previous close of 97.51 on Friday in late North American trade. The dollar scaled a high of 98.07 intraday and a low of 97.33.
The euro trended lower against the dollar at $1.0730 on Monday, as compared to its previous close of $1.0806 in North American trade late Friday. The euro scaled a high of $1.0821 intraday and a low of $1.0715.
Among other economic news, eurozone construction output declined for the first time in three months in February, Eurostat reported Monday. Construction output fell 1.8 percent in February from January, when it grew 1.6 percent. This was the first fall in three months and the biggest drop since September.
Germany’s producer prices declined at a faster-than-expected pace in March, figures from Destatis showed Monday. The producer price index fell 1.7 percent year-over-year in March, surpassing economists’ expectations for a 1.6 percent decrease.
The average asking price for a house in the United Kingdom was up 1.6 percent on month in April, property tracking website Rightmove said on Monday, coming in at a record 286,133 pounds. That follows the 1.0 percent increase in March.
The material has been provided by InstaForex Company – www.instaforex.com