Light oil futures trading higher on China stimulus, Greece

5 March 2010 5 March 2010

BonTrade

Light oil futures are trading higher in Asia on Friday after China signaled it would maintain its economic stimulus, rekindling hopes for accelerating growth to drain excess oil supplies. China’s Premier Wen Jiabao, in his annual address to the National People’s Congress, said China will continue an appropriately easy monetary stance and an active fiscal policy.

US Light crude oil futures for April gained 48 cents to $80.69 a barrel by 11:55 a.m. EST, after touching a seven week high of $81.23 two days ago.

“Fundamentally, thanks to the cold weather in the northern hemisphere, stocks including floating storage are decreasing,” said Keichi Sano, general manager of research at SCM Securities in Tokyo.

“But the market doesn’t look so strong to break above the $85 level,” Sano said. “Oil is trading in a very tight range despite recent fear of tightening monetary policy in China or Greece troubles, or upside potential because of Iran tensions.”

“I don’t think the market can break the range yet, but the euro/dollar is moving quite crazy, so it can eventually give some reason to break,” said Sano.