MW: Oil futures rise above $78/brl ahead of inventory data
By Polya Lesova, MarketWatch
FRANKFURT (MarketWatch) -- Oil futures rose above $78 a barrel on Tuesday, as worries over Dubai World's debt woes eased and the dollar declined, boosting sentiment in the energy markets.
Crude oil for January delivery gained 89 cents, or 1.2%, to $78.19 a barrel in electronic trading on Globex. It earlier rose to an intraday high of $78.44 a barrel.
Oil prices gained 1.6% on Monday.
"Current bullish market sentiment and a robust investment demand for oil still support the oil price at its present level," said analysts at Commerzbank in a note to clients.
However, "owing to sufficient supply, we expect lower oil prices in the medium term," they said.
U.S. stock futures rose on Tuesday, as investors bet that the crisis over state-owned conglomerate Dubai World's debt will be mostly contained in the region.
Tuesday's calendar features the Institute for Supply Management's manufacturing index for November, due at 10 a.m. Eastern. Economists polled by MarketWatch expect the reading to slip to 55% from 55.7%, though a strong reading from a Chicago-area gauge may hint at an improvement.
Construction spending figures for October as well as automotive sales in November will also be released on Tuesday.
In the currency markets, the dollar index (DXY 74.50, -0.38, -0.50%) , which tracks the performance of the greenback against a basket of other currencies, fell 0.5% to 74.496 in recent trading.
Oil prices and the U.S. dollar have had a very strong inverse relationship in recent months. When the dollar falls, oil prices tend to rise.
Inventory data ahead
The American Petroleum Institute will report data on inventories at 4:30 p.m. Eastern on Tuesday. The U.S. Energy Information Administration will release its more closely watched data on Wednesday morning.
Analysts polled by Platts expect a decline of 1.3 million barrels in crude supplies and a rise of 900,000 barrels in gasoline stocks. They also project a decline of 450,000 barrels in distillate supplies.
Also on Globex, January reformulated gasoline gained 1 cent to $2.03 a gallon and January heating oil added 2 cents to $2.07 a gallon.
January natural-gas futures fell 9 cents, or 1.9%, to $4.76 per million British thermal units.
