Crude Oil Range Bound Ahead Of Chinese Data

                     Crude oil is trading at 88.69 up by 42 cents as traders await tomorrow’s HSBC Chinese PMI data. Last week disappointing Chinese data sparked a global commodities sell off seeing gold tumbled the most in 30 years while crude oil fell close to $6.00 in a single day. Crude oil climbed back above $88 per barrel, as traders mulled the prospects for an output cut from the OPEC Countries after a recent slump in prices left oil with a loss of almost 4% on the week.

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Even after posting the biggest gain since March 26, a decline in oil prices is expected to carry on throughout the week amid lingering worries about higher crude supplies in the United States and signs of lower global demand. Most importantly, the trading sentiment towards commodities and energy precisely was strongly rippled last week by a round of downbeat projections for global oil demand, with lower growth for 2013 predicted by the IEA, EIA and the OPEC.

The International Monetary Fund trimmed its global economic growth forecast for 2013. The group has cut growth in the U.S., the world`s top oil consumer to 1.9 percent from 2 percent. China, the world`s second-top consumer, was cut to 8 percent from 8.2 percent.

Figures from China also showed that the growth in the world`s second oil consumer unexpectedly stalled in the first quarter of this year, triggering a sell-off this week in the oil markets, and pushing prices to a fresh low in 2013.

Bargain-hunting after the recent steep selloff is helping to support prices of WTI crude oil and Brent.  News of lower exports of Nigerian crude oil buoyed prices of European benchmark Brent crude, which had tumbled in the past six sessions to its lowest level since July 2. U.S. benchmark crude has dropped by more than $10 a barrel from highs in early April, as domestic crude oil and gasoline inventories have climbed, while demand for fuels remains sluggish. Front-month Brent, has fallen by about $12 a barrel this month, and the three-day string of prices below $100 a barrel is the longest since June 2012.

Representing 12 countries, including Qatar, UAE, Bahrain, Oman and Kuwait at International Monetary and Financial Committee meeting at Washington DC on Friday, Sultan N Al Suwaidi, Governor of UAE Central Bank, said high oil prices have positively impacted the performance of oil exporters. However, the growth performances across the Middle East region are mixed with considerable risks to the outlook from continued regional tensions and difficulties in the global economy.  He said inflation is expected to remain subdued in the Middle East. He said IMF support is needed to help many countries in the region avoid he medium-term challenges of high unemployment and sluggish growth. 

Natural gas is trading at 4.388 down by 49 pips this morning after having a record week. Natural gas futures rose to a 21- month high on NYMEX, capping the ninth weekly gain in a record streak, on speculation that forecasts of unusually cold weather next week will increase heating-fuel demand. Gas is expected to remain in a tight range ahead of this week’s inventory report, while slight declines may be expected as traders book profits. - FxEmpire