Crude Oil Soars To End Above $60 A Barrel

(RTTNews) - U.S. crude oil surged to end at a one-week high on Tuesday, ahead of the weekly oil reports from the American Petroleum Institute and the U.S. Energy Information Administration, with expectation for sharp drop in inventories.

The U.S. Energy Information Administration is scheduled to release its monthly short-term energy outlook later today, with investors also awaiting some crucial reports from the Organization of the Petroleum Exporting Countries and the International Energy Agency later this week.

A weaker dollar also supported the commodity, as any weakness in the dollar encourages buying in dollar-priced commodities, making it cheaper to holders of other currencies.

Markets have also been monitoring the weekly rig count in the U.S. as the declining count could mean a substantive reduction in supply glut. Industry research group Baker Hughes Inc. said the number of rigs actively drilling for oil in the U.S. dropped by 4 units last week to 642, the 26th consecutive week of decline.

Light Sweet Crude Oil futures for July delivery, the most actively traded contract, jumped $2.00 or 3.4 percent, to settle at $60.14 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for July delivery scaled a high of $60.37 a barrel intraday and a low of $58.23.

On Monday, crude oil dropped $0.99 or 1.7 percent, to settle at $58.14 a barrel, on concerns over a slump in demand from China with investors mulling over the impact of the Organization of the Petroleum Exporting Countries decision to maintain its current production levels.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.15 on Tuesday, down from its previous close of 95.25 on Monday in late North American trade. The dollar scaled a high of 95.58 intraday and a low of 94.85.

The euro trended lower against the dollar at $1.1287 on Tuesday, as compared to its previous close of $1.1292 in North American trade late Monday. The euro scaled a high of $1.1345 intraday and a low of $1.1215.

In economic news, a U.S. Commerce Department report showed wholesale inventories rose 0.4 percent in April compared to the previous month. This is up 4.5 percent compared to April 2014 levels. Economists had expected inventories to rise by 0.2 percent.

Elsewhere, Chinese inflation slowed more than expected in May on easing food price growth, and producer prices extended its decline for the 39th consecutive month, renewing fears of deflationary pressure amid weak demand.

Consumer prices increased 1.2 percent in May from last year, slower than the 1.5 percent growth seen in April, the National Bureau of Statistics said Tuesday. Inflation was expected to ease to 1.3 percent. This was the weakest inflation since January, when prices grew 0.8 percent and was also below the government's full year target of around 3 percent.

The NBS also showed that producer prices declined for 39 straight months. Producer prices dropped 4.6 percent for the third straight month in May. Prices were expected to fall by 4.5 percent.

The eurozone economy grew as initially estimated in the first quarter underpinned by widespread contribution from all sub-components. Gross domestic product expanded 0.4 percent, in line with the estimate published on May 13. The 19-nation currency bloc grew by revised 0.4 percent in the fourth quarter and 0.2 percent in the third quarter of 2014.

On a yearly basis, eurozone economic growth improved to 1 percent from 0.9 percent a quarter ago. The annual growth rate also matched flash estimate.

Germany's labor costs growth quickened in the first quarter of 2015, reaching the highest since first quarter of 2013, data from the Destatis showed Tuesday. Labor costs per hour worked, consisting of gross earnings and non-wage costs, grew a calendar adjusted 3.2 percent year-on-year in the first quarter. This is faster than the revised 2.1 percent rise in the fourth quarter and the highest rate of growth since the first quarter of 2013 when costs rose 3.9 percent.

Germany's manufacturing turnover increased for the first time in three months in April, preliminary figures from Destatis showed Tuesday. Manufacturing turnover rose a seasonally and working-day-adjusted 1.2 percent month-over-month in April, reversing a 0.3 percent fall in March, which was revised from a 1.0 percent decrease estimated earlier.

The U.K. trade deficit narrowed more than expected to a 13-month low in April, the Office for National Statistics showed Tuesday. The visible trade deficit narrowed by GBP 2.1 billion to GBP 8.6 billion in April, the smallest shortfall since March 2014. This was also the largest monthly fall since June 2013. The deficit was forecast to narrow to GBP 9.9 billion.

Japanese consumer sentiment fell unexpectedly in May, survey results from the Cabinet Office showed Tuesday. The consumer confidence index dropped to a seasonally adjusted 41.4 in May from 41.5 in April. It was forecast to rise to 41.9.