Oil Gains on Encouraging China Data, Gold Slips as Investors Dip Toes Towards Risk
Oil is gaining ground in early morning trade as Asian and European shares rise on the back of strong economic data from China and Japan in particular. Beijing reported that Chinese exports rose to their highest level in six years in May, rising 48.5% from a year ago. Meanwhile, Japan's economy grew at an annualized 5% rate in the first quarter.
Gold, on the other hand, is falling as investors' willingness to take on risks increased on renewed hopes for the global economy. In addition, the yellow metal came under selling pressure as the euro rose following comments by China's national pension fund chief Dai Xianglong who said that the European unit would weather the ongoing sovereign debt crisis.
At 0755 ET, Brent crude is up 0.5% at $74.64 a barrel, while light sweet crude is up 0.7% at $74.83 a barrel, and natural gas is up 1.0% at $4.72 a million British thermal units.
Gold is 0.3% weaker at $1,225.70 an ounce, while silver is down 0.9% at $18.04 an ounce, but copper is up 0.2% at $2.85 a pound.
The International Energy Agency lifted its 2010 forecast for global oil demand, as it anticipates worldwide use to rise by 1.7 million barrels a day, or up 2% on year, to 86.4 million barrels. That marks a rise of 60,000 barrels from the agency's earlier estimate.
Chinese oil import rose 29% during the first five months of the year compared to the same period a year ago to 95.7 million metric tons on strong demand for motor fuel and electricity, according to the General Administration of Customs.
BP plc ( BP ) shares fell to a 13-year low in London trade as the company continues to face attack for its handling of the Gulf of Mexico oil spill. In U.S. pre-market trade, the stock is gaining the bulk of the decline back as it bounces 11% higher. BP has estimated that the total cost of response efforts to the worst U.S. environmental disaster has reach over $1.4 billion to date.
Australia's Kingsgate Consolidated Ltd ( KCN ) soared as the gold mining group was raised to outperform to sector perform by RBC Capital. The mining group was also granted tax concessions by the Thai government for a new processing plant at its flagship Chatree gold mine in the country.
South Africa's Impala Platinum Holdings LTD ( IMP ) fell as did Anglo Platinum Ltd ( AMS ) as platinum prices continued to fall. The metal is a key component for clean emissions technology used by auto manufacturers.