crude oil inventories economy gas prices commodities markets stocks
Damian Dovarganes/AP
LONDON -- Oil prices on both sides of the Atlantic rose Wednesday, with the U.S. benchmark climbing to a 14-month high near $105 a barrel, buoyed by a sharp decline in fuel stockpiles in the United States.

But worries about a sluggish Chinese economy, underlined by bleak June trade data, kept a lid on price gains.

U.S. crude rose $1.26 to $104.79 a barrel by 0959 GMT (5:59 a.m. Eastern time), after hitting a 14-month high of $104.87. Brent edged up 32 cents to $108.13 a barrel.

"While oil demand in the U.S. appears to be reviving, current figures from China point to slowing demand dynamism there," said a Commerzbank research note.

The spread between Brent and U.S. oil narrowed 85 cents to $3.41 as the U.S. benchmark gained on data showing a drawdown in stocks.

U.S. crude stocks fell nearly 9 million barrels last week, compared with analyst expectations for a drop of 3.3 million barrels, according to the American Petroleum Institute. The U.S. Energy Information Administration is scheduled to release its inventory report later in the day.

But analysts pointed out that the drop in U.S. stockpiles, which is boosting oil prices, is being driven by the nation's summer driving season and that global demand prospects remain weak.

"The market is too high from a fundamentals point of view," said Jonathan Barratt, chief executive of Sydney-based commodity research firm Barratt's Bulletin. "It is riding on the back of expectations of a revival in U.S. demand."

Economic Outlook

China, the world's No. 2 economy, warned of a "grim" outlook for trade as it surprised markets by reporting a fall in June exports and imports when both had been expected to rise.

Its crude imports for the first half of the year fell 1.4 percent from a year ago.

"China is expected to stay below the 8 percent growth rate seen last year and might grow by 7.8 percent over 2013," said a JBC Energy market report.

"The slowdown of its economy has become a serious concern and latest trade data confirms that the country faces problems at its key export markets."

The International Monetary Fund trimmed its global growth forecast Tuesday for the fifth time since early last year, due to a slowdown in emerging economies and recession-struck Europe, which also put a lid on oil prices.

But geopolitical risks remained and investors continued to watch the situation in Egypt, helping cushion oil prices.

Egypt's interim authorities, boosted by $8 billion in Gulf aid, start work on forming a cabinet on Wednesday, a week after the elected Islamist president was ousted by the army leading to a wave of violence in which at least 90 people were killed.

Additional reporting by Jessica Jaganathan and Manash Goswami in Singapore.

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China concerned about a slow economic growth of 7.8% for this year. Imagine if we had leadership here, and got even half that growth. Imagine if we had a president who understood our own energy resources, and its effect on our economy. imagine if we had a president who understood business. Imagine if we had a president who understood compromise. Imagine if we had a president who had the respect of the global community, so as to better participate in the global market. Imagine if we had a president who told the truth. Imagine.

July 10 2013 at 1:08 PM Report abuse rate up rate down Reply

& the hedging begins.

July 10 2013 at 12:50 PM Report abuse rate up rate down Reply

. back in the 70's when the govt and big oil claimed there was a gas shortage, my dad told me he watched two gas truck tankers pull into the back of a refinery having come back from "their" route, unable to unload at a gas station because the gas tanks were full. no where to unload because the refineries storage gas tanks were also full. they were driven to the back lot and the full gas tank trucks merely emptied both truck loads of gasoline onto the ground to get rid of it. he was working nearby and seen it with his own eyes. He laughed, there was no gas or oil shortage, it was merely a ploy to raise gas prices and oil prices. If there really was a true oil shortage. then by the environmental experts prediction, we would have run out of oil by 1990 across the planet. Strange, it's still being pumped out. either they didn't know what they were talking about, or, it was a pitch for "green energy" or.. it's total greed perpatrated by the govt and big oil which It probably is. The whole country needs to spend two days of not buying any gasoline. watch the govt and big business panic. watch those prices come dropping, Remember when the stock market crashed a bit. what happened to the price of oil. it dropped down below $2 a gal. now there was an awakening.

July 10 2013 at 12:26 PM Report abuse +1 rate up rate down Reply

the drop in U.S. stockpiles, is caused by big oil cutting back on production, so they can raise gas prices AGAIN !

July 10 2013 at 12:25 PM Report abuse +4 rate up rate down Reply

AS much as I don't like O, the oil companies are causing this problem. Point is they are selling to the highest bidders, foriegn are willing to pay more. Big oil is like a ***** they will always go where the money is. All you have to do is check out which ports import and export crude and take a look at their numbers. Draw your own conclusion. Crude derived from Eagle shale for the most part is going overseas. If you think I am kidding look along I-37 all the way to it's southern end and you will see new storage tanks being built, is that because we are running out of crude???? I think not, it is waiting to be put on tankers for export!!!

July 10 2013 at 12:01 PM Report abuse +5 rate up rate down Reply

Next to ObamaCare --- the gasoline/oil price increases are the biggest SCAMS in the 21st Century!!! Obama (yes your President) has blocked the Keystone pipeline which would allow more crude into the US --- AND he has blocked drilling in numerous areas. He now says, "oh, we are allowing drilling" --- what he does not say --- the permits for the present drilling were issued during the last Administration!!!! He lies every time he speaks... and a lot of the liberal fools simply follow him like lambs to the slaughter !!! Now, in short order, the insurance premiums will skyrocket and Doctors will refuse Medicare... (a lot already are doing so)...... Obama is trying to make us a European Country --- and that is BACKWARDS FOLKS.. WAKE UP !!!!

July 10 2013 at 11:47 AM Report abuse rate up rate down Reply
2 replies to Hi RON's comment

Keystone XL crude is destined for EXPORT, to be burned to generate electricity in CHINA, since tar sands oilis so thick, it costs too much to refine into gasoline, diesel, and aviation kerosene.

Why don't you ask Big Oil to stop exporting 600,000 barrels of gasoline, diesel, and aviation kerosene DAILY

July 10 2013 at 12:42 PM Report abuse +3 rate up rate down Reply

Your post is a load of crap. What product does America EXPORT in the largest amount? Answser - crude. If the Keystone pipeline was opened big oil would just EXPORT that crude also. it would NOT stay here in America. It would go to China because they are willing to pay more. Obama is smart by keeping America's crude in the ground for our future. We have supported China's economy enough already.

July 10 2013 at 1:58 PM Report abuse +2 rate up rate down Reply

Anybody smel market manipulation here? The big guy screwing the little guy again. Time to go to the pharmacy and get another jar of vaseline.

July 10 2013 at 11:26 AM Report abuse +6 rate up rate down Reply

the point is it's time to screw the AMERICANS again, yet and still. what is NOT NORMAL about this. schools starts, the public gets screwed. simple. apply for your odumass bucks and free phone soon. they are running out!

July 10 2013 at 10:41 AM Report abuse rate up rate down Reply

sounds like 73 all over again, why does the gov't allow the oil companies to rip off the ameican people

July 10 2013 at 10:31 AM Report abuse +4 rate up rate down Reply

And Exon-Mobile reports record profits again...and again. USA is producing more homegrown oil production than at any other time in our history.....Refiners are sending the product offshore for wicked profits while creating a shortage in US stockpiles... A profit situation for big oil !..C'mon we are being played for suckers !

July 10 2013 at 10:10 AM Report abuse +5 rate up rate down Reply