Crude oil prices were stronger this morning on the unexpected
news that China cut interest rates for the first time since the
depths of the financial crisis.
July crude futures on the NYMEX were up $1.43, or 1.6%, at
$86.45. Brent crude is maintaining triple digits, last quoted up
$1.23, or 1.22%, at $101.87.
The energy sector is expected to open higher in reaction; Suncor
Energy, for instance, is up 0.32, or 1.1%, at $28.80 in the U.S.
The aggressive step by China has provided optimism that global
growth won't slow down as much as some had feared.
Also providing support was the latest U.S. crude inventory
report, released Wednesday, which saw stocks decline after 10
straight weeks of increases -- albeit at a smaller pace than
Also bullish for crude is lingering worries about supply
disruption from the Middle East over Iran's nuclear program.
Goldman Sachs, in a new research report, noted that the global
oil market has been tightening up.
"The market has shifted from surplus to balanced on a seasonally
adjusted basis, and we expect the oil market will move into a
seasonally adjusted deficit as sanctions go into effect and world
oil demand begins its seasonal rise, drawing inventory and
requiring higher prices," Goldman Sachs said in a research
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