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Monday, November 24, 2014

Crude gets a good boost

Interest rate cut by China moves up prices 


Crude-oil futures got a big bump on Friday, 21 November 2014 at Nymex after the People's Bank of China announced a surprising swath of interest-rate cuts intended on boosting its economy. 

On the New York Mercantile Exchange, light, sweet crude futures for delivery in January rose 66 cents, or 0.9%, to settle at $76.51 a barrel. On the week, crude gained 0.9%, snapping a seven-week losing streak. 

On Friday, the People's Bank of China announced its first rate cut in two years, lowering its deposit rate 25 basis points to 2.75% and trimming its one-year lending rate 40 basis points to 5.60%. The moves rise hopes that the country will increase its consumption of industrial materials and oil. 

Ahead of that, European Central Bank President Mario Draghi signalled that the central bank was ready to step up asset-buying, also igniting hopes for the euro zone economy — and oil demand more broadly. 

Among other energy products, Nymex gasoline for December rose nearly 3 cents, or 1.4%, to $2.0565 a gallon. On the week, gasoline gained 0.7%. December heating oil rose 2.45 cents, or 1%, to $2.4045 a gallon. The commodity declined 0.5% on the week, however. 

Natural gas for December delivery fell 22 cents, or 5%, to finish at $4.2660 per million British thermal units. On the week, however, natural gas gained 6.1%.
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