MARKET WATCH: Crude oil price slips lower as China raises interest rate

Sam Fletcher
OGJ Senior Writer

HOUSTON, July 7 — Energy commodity prices were mixed July 6, with crude slipping lower in the New York market after the People’s Republic of China announced another increase in the yuan benchmark interest rate as of July 7 ahead of the official June consumer price index (CPI) data release on July 15.

“The broader markets ended flat, as concerns regarding the national debt ceiling caused investors to take pause after last week’s rally,” said analysts in the Houston office of Raymond James & Associates Inc. Despite forecasts for warmer-than-normal weather, they said, a resurgence in nuclear utilization dropped natural gas prices by 3%. Lower commodity prices pulled down corporate energy stocks.

James Zhang at Standard New York Securities Inc., the Standard Bank Group, said, “Oil ended broadly flat after recovering from some intraday sell-off on the back of further monetary tightening out of China and uninspiring US Institute for Supply Management (ISM) nonmanufacturing data.” He said, “The term structure for West Texas Intermediate strengthened in anticipation of further crude stock draws in the US. European refining margins weakened further as product cracks fell across the barrel.”

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