Oil prices mixed before US inventories

30th November 2011, Comments 0 comments

Oil prices were mixed on Wednesday as traders awaited energy inventory data from the United States for an indication of crude demand strength in the world's biggest economy.

Investors meanwhile reacted to geopolitical unrest in major oil exporter Iran and news that China had unexpectedly cut its bank reserve requirement ratio, helping to offset eurozone debt concerns, dealers said.

New York's main contract, light sweet crude for delivery in January, rose 30 cents to $100.09 a barrel.

Brent North Sea crude for January fell 71 cents to $110.11 in London midday deals.

The United States, the world's biggest consumer of oil, publishes later on Wednesday an official weekly snapshot of the country's energy inventories.

Analysts polled by Dow Jones Newswires expect the Department of Energy to announce that crude inventories dropped by 500,000 barrels last week.

Ahead of the data, China's central bank on Wednesday said it would cut the reserve requirement ratio for the country's banks by 0.5 percent, in the strongest move yet to ease restrictions on lending.

The move, which takes effect on December 5, is a sign that the government in the world's biggest energy consumer is easing tight credit restrictions put in place to curb surging inflation and property prices.

The People's Bank of China said in the brief statement that it will reduce the ratio by 0.5 of a percentage point, effectively increasing the amount of money banks can lend.

Crude prices were meanwhile winning support from tensions in Iran.

Britain was evacuating all its diplomatic staff from the Islamic republic on Wednesday, a day after protesters stormed its embassy in Tehran in scenes that prompted international outrage.

The protesters had been taking part in demonstrations in front of the British compounds with the approval of authorities, to reflect official anger at Britain's announcement last week that it was cutting all relations with Iran's financial sector.

Britain's step was part of new sanctions coordinated with the United States and Canada to pile pressure on Iran to halt its nuclear activities, which Western governments suspect is cover for a drive for a weapons capability.


© 2011 AFP

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