BEIJING: According to Sushil Finance, crude oil prices to trade positive on the back of violence in Yemen and a storm in the Gulf.
Oil prices plummeted on Tuesday, settling 8 percent lower, as weak Chinese data extended a roller-coaster run that knocked oil to its lowest in 6-1/2 years last week before frenzied short-covering fueled a 25 percent three-session surge.
The past few weeks have been among the most volatile in the modern oil market’s three-decade history, with prices plunging early last week as worries about China’s economic strength sent shivers through risk markets, only to bounce back fiercely as bearish traders rushed to cash in short positions.
Traders took flight on Tuesday after seeing China’s official Purchasing Managers’ Index (PMI) drop to 49.7 in August and U.S. manufacturing sector growth slow to its weakest pace in more than two years, reinforcing fears of slowing global growth and weaker fuel demand. Some also wondered if the 25 percent three-day surge through Monday, the biggest since Iraq’s invasion of Kuwait in 1990, was overdone given a persistent global supply glut.
And an OPEC magazine commentary that some traders interpreted on Monday as signaling a possible subtle policy shift was nothing of the sort, OPEC insiders said. American Petroleum Institute (API) data showing U.S. crude inventories soared 7.6 million barrels last week also pressured prices postsettlement. Crude oil stocks were expected to have been unchanged last week, a Reuters survey of analysts said.
