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October 23, 2021
Business International News

Oil prices climb on upbeat economic data, ECB stimulus moves

Image: An oil pump is seen in Varadero, Matanzas province, Cuba, during an organized tour by the state-run Cuba-Petroleo (CUPET), October 21, 2015. REUTERS/Enrique de la Osa


By Keith Wallis

SINGAPORE (Reuters) – Oil prices extended gains into a second day in Asian trade on Friday, finding support from brighter economic data and a global stock market rally after the European Central Bank signaled its willingness to launch more stimulus measures.
Brent for December delivery rose 36 cents to $48.44 a barrel at 10.52 p.m. ET after settling up 23 cents in the previous session.

U.S. crude for December delivery climbed 22 cents to $45.60 a barrel, having risen 18 cents previously.

The gains followed a slew of upbeat economic data, while ECB president Mario Draghi said new Eurozone pump priming initiatives could be unveiled as soon as December.

“It’s all about the numbers,” said Jonathan Barratt, chief investment officer at Sydney’s Ayers Alliance.

“The market is taking the view that governments will not allow economies to falter. These expectations suggest more active economic development will force consumption to go up,” he said.

Average new home prices in China rose in September for a fifth straight month, according to Reuters calculations from official data published on Friday.

That came as data from the United States on Thursday showed a strong rebound in home resales in September and new applications for unemployment benefits hovered around 42-year lows last week.

Asian stock markets, including Japan and Australia, joined a global shares surge that buoyed overall sentiment, although a strengthening dollar, which rose to a fresh two-month peak against the euro, capped oil price gains.

A stronger greenback makes commodities denominated in the dollar more expensive for holders of other currencies.

But rising U.S. oil inventories, which climbed by a larger than expected 8 million barrels to 476.6 million last week, are a potential headwind to oil prices, helping to fuel concern over global oversupply. [EIA/S]

Investors are waiting for the latest rig data later on Friday for guidance on a further fall in U.S. oil production, which has dropped to below 9 million barrels per day, Phillip Futures in a note.

“If the (downward) trend continues it shows supply is being eaten into,” Barratt said.
Markit flash manufacturing PMI data from the Eurozone and the U.S. later on Friday could give further direction to oil prices.

(Reporting by Keith Wallis; Editing by Michael Perry)

Copyright 2015 Thomson Reuters. Click for Restrictions.

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