Crude gains after US crude stocks decline

TOKYO: US crude futures rose firmly to above $97 a barrel on Thursday after industry data showed declines in US crude and product inventories.

FUNDAMENTALS

NYMEX crude for August delivery was up 54 cents at $97.19 a barrel by 2335 GMT, after settling down 24 cents at $96.65 on Wednesday.

London Brent crude for August delivery was untraded, after settling up 1 cent at $113.62.

After the settlement on Wednesday, industry group American Petroleum Institute said US crude stocks fell 3.2 million barrels last week, a sharper decline than expectations for a 2.3 million barrel drawdown.

Gasoline stocks fell 1.9 million barrels against expectations for an increase of 100,000 barrels. Distillate stocks fell 1.6 million barrels, compared with forecasts for a 700,000 barrel gain.

The market was waiting for a similar weekly report by the US Energy Information Administration and weekly US jobless claims data due out later in the day.

Growth in the US services sector dipped modestly in June, an industry report showed. The Institute for Supply Management said its services index fell to 53.3 last month from 54.6 in May, shy of economists' forecasts for 54.0 in a Reuters survey.

China raised interest rates for the third time this year, making clear that taming inflation remains a top priority even as its vast economy gently eases.

MARKETS NEWS

Transportation stocks were among the standouts in another flat session for US equities on Wednesday, and the sector's rally could be cause for optimism ahead.

The Dow Jones industrial average was up 56.15 points, or 0.45 percent, at 12,626.02. The Standard & Poor's 500 Index rose 1.34 points, or 0.10 percent, to 1,339.22. The Nasdaq Composite Index was up 8.25 points, or 0.29 percent, at 2,834.02.

The euro slid against the US dollar for a second straight day on Wednesday as a China interest rate hike raised global growth concerns in a market already unnerved by the downgrade of Portugal's debt to junk.

Copyright Reuters, 2011