A denial by the Chinese that they’re ready to start offloading eurozone assets due to the sovereign debt crisis pushed oil prices up another 4% Thursday. The July futures contract traded up $3.04, or 4.3%, at $74.55 a barrel in New York, the best finish for a most-active contract for a couple of weeks.
Analysts say crude was oversold, and China’s decision to reaffirm its commitment to the euro was the spark needed to light up the market.
China’s State Administration of Foreign Exchange (Safe), in charge of the country’s massive foreign exchange reserves, called the FT’s report “groundless”.
“Safe is a responsible long-term investor and, under the principle of maintaining diversified investments, Europe has been and will continue to be one of the major markets for investing China’s exchange reserves,” it said in a statement.
This latest rally takes the two-day gain to over 8% after a government report out midweek revealed a decline in Cushing inventories and strong demand for gas, sending oil up $2.76 to $71.51 a barrel.
On the metals market, gold was off colour as investors regained their risk appetite, taking money out of so-called safe haven investments like the yellow metal and piling into riskier assets.Gold for August delivery, the most active contract, fell 90 cents to $1,214.40 an ounce, while the front-month June contract dipped $1.50 to $1,211.90.
Elsewhere, palladium did well, up almost 4% on the day, platinum also improved, as did copper, although silver lost its shine.
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