Oil up in Asian trade after rise in US equities

Oil up in Asian trade after rise in US equities
SINGAPORE: Oil rose in Asian trade Thursday, tracking gains in US equities markets, analysts said, while dealers seemed to ignore data showing a surge in stockpiles.

New York's main contract, light sweet crude for July delivery, gained 36 cents to $101.68 a barrel, while Brent North Sea crude for the same month was up 30 cents to $115.23.

"The WTI was $1.73 higher (in New York late Wednesday), settling at $101.32, which was a two-week high because the equity market was high," said Shailaja Nair, a Singapore-based Platts analyst.

US stocks posted modest gains Wednesday, snapping a three-day losing streak, despite disappointing manufacturing data from the US, the world's largest economy and number one oil consumer.

A bearish report from the Department of Energy (DoE) Wednesday that showed US crude stocks rose 600,000 barrels in the week to May 20 appeared to have a muted impact on sentiment.

The weekly DoE report also said US gasoline inventories jumped 3.8 million barrels in contrast to predictions of a drop.

Gasoline figures are being closely watched ahead of the peak-demand US driving season in the starting next week, when many Americans begin hitting the road for their summer holidays.

Some analysts think higher prices have forced consumers to cut their fuel use.

Natixis analyst Nic Brown pointed out that it was the fourth week in a row of weak US demand for oil products -- with demand off four percent from a year earlier.

"Volatility remains high and sentiment is constantly shifting," said Michael Fitzpatrick of the Kilduff Report.

Prices had been given a lift by reports Tuesday from Goldman Sachs and Morgan Stanley in which they raised their 2012 forecasts for Brent to around $130 a barrel.

Asian shares up on Wall St rise, bargain buying

Asian shares up on Wall St rise, bargain buying
HONG KONG: Asian markets began the day on a high Thursday as dealers picked up undervalued stocks following a recent sell-off while the first gain for the Dow in three days also provided some support.

Tokyo was 1.29 percent higher by the break, Sydney gained 1.10 percent, Hong Kong opened 0.58 percent stronger while Shanghai added 0.72 percent and Seoul jumped 1.23 percent.

"Asian markets are opening stronger, and we expect it to be a risk-on day in the region," Credit Agricole said in a note to clients, according to Dow Jones Newswires.

The rallies followed a Dow gain of 0.31 percent on Wednesday.

Resource firms were among those leading the gains as commodity prices began to rise, with oil rallying after Goldman Sachs and Morgan Stanley raised their 2012 forecasts for the cost of Brent to $130 a barrel.

The rises also came despite a surprising 600,000-barrel increase in US crude stockpiles in the week to May 20, confounding analyst expectations of a fall.

New York's main contract, light sweet crude for July delivery, gained 36 cents to $101.68 a barrel, while Brent North Sea crude for the same month was up 30 cents to $115.23.

Crude was also given a fillip by gains in equity markets, which indicated improving sentiment.

The gains came after big losses in recent sessions caused by worries over the European debt crisis and data from China suggesting the world's number two economy was beginning to ease.

In the eurozone the Greek debt crisis continues to unsettle after sharp exchanges between the European Central Bank, which opposes any restructuring of its obligations, and politicians hoping to find some way out of an impasse.

The downgrading of Athens' debt rating by Fitch on Friday, the downgrading of Italy's outlook by Standard & Poor's and rising concern over Spain's economy have also brought the European crisis back into focus.

However, despite the debt woes the euro rose in early trade after Wang Yong, a professor at the People's Bank of China's training institute, said Beijing should expand purchases of eurozone sovereign debt.

He also said China should increase direct investment into Europe. Such moves would help alleviate the global crisis, he added.

The comments sent the euro up to $1.4136 from $1.4083 late Wednesday in New York and to 115.86 yen from 115.40.

The dollar was worth 81.96 yen, up from 81.89 yen in New York.

Shanghai rose after a five-day sell-off caused by economic worries that were magnified by data showing a preliminary HSBC Purchasing Managers Index had slipped to a 10-month low, pointing to a slowdown in manufacturing.

In Tokyo, office equipment and camera maker Ricoh jumped 4.5 percent on a report in the Nikkei business daily that it was planning to sack 10,000 people worldwide as it tries to streamline.

Gold opened in Hong Kong at $1,525.00-$1,526.00 per ounce, up from Wednesday's close of $1,523.00-$1,524.00

Euro firms on China scholar's investment comment

Euro firms on China scholar's investment comment
TOKYO: The euro firmed during Asian trade Thursday after a Chinese scholar published a media commentary arguing that Beijing should expand purchases of euro-zone sovereign debt.

Investors flocked to the single currency after Wang Yong, a professor at the People's Bank of China's training institute, wrote in his piece that China should also increase direct investment into Europe.

For China, such moves should both help alleviate the global crisis and contributes to "counter-protectionism strategy," giving Beijing more leverage to negotiate for concessions in trade talks, Wang wrote.

The piece triggered buying of the euro, which jumped to $1.4136 and 115.86 yen from $1.4083 and 115.40 yen in New York Wednesday.

Still, traders said the Greek debt concerns should limit the euro's gains as investors remained cautious amid uncertainty about how the fiscally-strapped nation's problems could be resolved.

"While we continue to see a market- and euro-friendly outcome (on Greece) as the most likely on a multi-week view, political risks make a further euro/dollar breakdown very real," BNP Paribas analysts said in a note to clients.

The euro's gain was also magnified in part due to thin trading in Asia, traders said.

The dollar was at 81.96 yen, nearly flat from 81.89 yen in New York.