Traders Hope Oil Gets 'Stimulated'; ETFs on the Move (USO) (OIL)
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Crude ETFs are making the rounds today on fresh stimulus hopes. And by "making the rounds," we mean "doing really well."
Over the weekend, China said its manufacturing expanded at the slowest pace in 2012, dropping from 50.4 in May down to 50.2 for June. Amid the slide, the number was still above consensus views calling for a reading of 49.9.
Monday, the ISM Manufacturing Index slipped to a three-year low of 49.7. from 53.5 in May and the lowest reading since May 2009.
Finally, Europe's Manufacturing PMI made an unexpected drop to 49.7 from 53.5 in May.
With many expectations of U.S. stimulus on hold following recent announcements from Fed Chair Ben Bernanke, traders are hoping that global central banks will be move to stimulate their own economies. In May, China made a move by cutting its key one-year lending rate by 25 basis points, an indication that the emerging market giant wants to keep pace on its economic expansion.
More stimulus would lead to more demand for crude as infrastructure's get built and goods get shipped. United States Oil (NYSE: USO) is up 4.3 percent while iPath S&P GSCI Crude Oil (NYSE: OIL) is up 4.5 percent Tuesday. EIA data for crude inventories will be released Thursday, with expectations for a drop of 900,000 barrels.
Crude August contracts are up $3.50 to $87.25 per barrel on the Comex.
Over the weekend, China said its manufacturing expanded at the slowest pace in 2012, dropping from 50.4 in May down to 50.2 for June. Amid the slide, the number was still above consensus views calling for a reading of 49.9.
Monday, the ISM Manufacturing Index slipped to a three-year low of 49.7. from 53.5 in May and the lowest reading since May 2009.
Finally, Europe's Manufacturing PMI made an unexpected drop to 49.7 from 53.5 in May.
With many expectations of U.S. stimulus on hold following recent announcements from Fed Chair Ben Bernanke, traders are hoping that global central banks will be move to stimulate their own economies. In May, China made a move by cutting its key one-year lending rate by 25 basis points, an indication that the emerging market giant wants to keep pace on its economic expansion.
More stimulus would lead to more demand for crude as infrastructure's get built and goods get shipped. United States Oil (NYSE: USO) is up 4.3 percent while iPath S&P GSCI Crude Oil (NYSE: OIL) is up 4.5 percent Tuesday. EIA data for crude inventories will be released Thursday, with expectations for a drop of 900,000 barrels.
Crude August contracts are up $3.50 to $87.25 per barrel on the Comex.
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