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Date and page printing time: November 21th 2009 04:58 GMT

Trade's Tools | The FOREX market news

DJMN: OIL FUTURES: Oil Above $79/Bbl On Upbeat Factory Orders
By Claire Rangel Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Crude futures rose above $79 a barrel Tuesday after upbeat U.S. factory orders renewed confidence in the economy amid a general spurt of investor buying across the board in commodities.
Light, sweet crude for December delivery settled $1.47, or 1.9%, higher, at $79.60 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled $1.56, or 2% higher, at $78.11 a barrel.
Orders for U.S. manufactured goods increased by a seasonally adjusted 0.9% in September on gains in machinery, autos, defense goods and chemicals, the Commerce Department said. Exceeding analyst expectations, this was the fifth increase in six months.
The oil market has been taking its cue from economic data recently, hoping that a revival in the economy will lift flagging oil consumption and help to draw down the massive glut in oil stocks.
The factory data appeared to trigger a flight of investor money back into the commodity spectrum, particularly into oil and gold, said Mark Waggoner of Excel Futures in Newport Beach, Calif.
The buying surge erased earlier losses in crude, which dipped to an intraday low of $76.55 a barrel, after the dollar strengthened to a one-month high against the euro and global equity markets posted losses.
But as equities "moved off their lows and the dollar backed off its highs, financial trends became supportive to oil late in the session," said Tim Evans, analyst at Citi Futures Persepective in New York.
Analysts also noted that the ability of crude to find support at the $76.50 a barrel mark, above the most recent long-term trading range of $65-$75 a barrel, triggered further upward momentum in prices.
Key oil data reports ahead could set the next move for the oil markets. Analysts surveyed by Dow Jones anticipate a 1.4 million barrel build in crude stocks when the U.S. Department of Energy releases its weekly inventory report at 10:30 a.m. EST Wednesday.
Gasoline stocks are seen falling 100,000 barrels and distillates, which include diesel and heating oil, are seen dropping by 1 million barrels. Analysts are expecting refinery processing rates to nudge up by 0.1 percentage point, to 81.7% of capacity.
The American Petroleum Institute, a trade group, will release it's inventory figures at 4:30 p.m. EST Tuesday.
With the oil market largely "ignoring surplus stock levels during its long climb from under $50 to more than $80, we don't think that it requires a bearish inventory shock to justify a move lower," noted Evans.
Prices may only move lower if there is recognition that while the wider economy may be on track for a modest economic recovery, rising oil production means that the market will remain in an overall supply/demand surplus, he said.
Front-month December reformulated gasoline blendstock, or RBOB, settled 90 points, or 0.5%, higher, to $1.9993 a gallon. December heating oil settled 2.73 cents, or 1.3%, higher, to $2.0733 a gallon.

More information on settlements and highs and lows for futures on Nymex and ICE platforms can be found by searching for the following headlines:
Nymex Light Crude Oil Close Nymex Harbor RBOB Gasoline Close Nymex Heating Oil Close ICE Brent Crude Oil Close ICE Gas Oil Close
-By Claire Rangel, Dow Jones Newswires; 212-416-2846; claire.rangel@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=zzvIlbd1ABWdI3%2FD8hQw4w%3D%3D. You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires
November 03, 2009 15:34 ET (20:34 GMT)

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