Oil Rises on Higher Gasoline Demand and China Stimulus

Oil prices gained on Tuesday as higher seasonal demand in developed economies offset the impact of a large global supply overhang.

Expectations of a fall-off in U.S. shale oil production and a weaker dollar also underpinned prices.

Brent for July delivery LCOc1 was up 95 cents to $63.64 a barrel as of 08:46 GMT (04:46 EDT), having settled down 62 cents in the previous session.

Front-month U.S. crude CLc1 climbed 73 cents to $58.87 a barrel, after ending the previous session down 99 cents.

Demand for oil tends to increase in the summer months as drivers take to the roads for holidays in Europe and the United States. This has helped counter the impact of a growing glut in supply that has led to tankers storing oil at sea.

“There is currently seasonal demand for oil, so there is less of a build in crude oil stocks,” said Olivier Jakob at Petromatrix in Zug, Switzerland. “But there is still too much oil for the rally to take hold.”

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza