Oil prices fall in volatile trade
NEW YORK—Oil prices climbed late Tuesday after trading lower for most of the day, encouraged by strong trade numbers from China that showed its economy still growing strongly.
Concerns about the impact on Mississippi corridor refineries of the river’s worst flooding since 1925 also helped move prices up, though they were still far below last week’s peak.
In New York, West Texas Intermediate crude for June delivery surged $1.33 to $103.88, after dropping to $100.12 early in the day. In two days, WTI has recovered $6.70 a barrel following last week’s nearly $17 plunge.
Brent North Sea crude for June delivery in London trade added $1.73 to $117.63.
Chinese trade data indicated oil demand continues strong despite Beijing’s efforts to cool the economy, said JP Morgan’s commodities research group.’
“In spite of elevated prices several surveys of major refiners indicate that imports will also remain strong in May,” they said, adding that they expect higher oil use for power generation during the summer.
China’s trade surplus ballooned to $11.4 billion in April and exports hit a record monthly high, data showed Tuesday.
Traders were also concerned about the impact of the Mississippi flooding on oil refiners based along the southern reaches of the swollen river.
“Rising waters in the Mississippi may thwart refiners just when we need them most,” said Phil Flynn of PFG Best.
Meanwhile, the US Energy Information Administration projected the WTI price would average $102.67 per barrel in 2011, a $4 downward revision from its earlier forecast, while projecting $107 a barrel for next year.
“EIA still expects oil markets to tighten through 2012, given projected world oil demand growth and slowing growth in supply from countries that are not members of the Organization of the Petroleum Exporting Countries (OPEC),” they said.
