Crude Oil Ends Over $61 A Barrel Ahead Of Supply Data

(RTTNews) - U.S. crude oil ended higher for a second straight session on Tuesday, with traders taking positions ahead of the weekly oil report from the U.S. Energy Information Administration on Wednesday and the American Petroleum Institute later today. Oil prices scaled over $61 a barrel despite further signs the Chinese economy is sputtering and the dollar trending sharply higher against a basket of some major currencies.

In some disappointing economic news from China, the latest Flash Manufacturing PMI for June showed contraction albeit at a slower pace. The sector showed signs of improvement as output stabilized amid a slight pick-up in total new work and purchasing activity rising slightly over the month. The data also evidenced the sector has lost growth momentum in the second quarter as a whole.

Meanwhile, new home sales in the U.S. showed a further upside in May to reach its highest level in over seven years, while new orders for U.S. manufactured durable goods fell more than expected in May with orders for transportation equipment dropping steeply.

Greece's international creditors are in the process of scrutinizing fresh reform proposals submitted by Athens on Monday to weigh the scope for reaching an agreement in the Eurogroup meeting scheduled for Wednesday. Nevertheless, 'Grexit' worries refuse to die down as voices of dissent could be heard in Athens even from within the ruling party over more concessions being offered.

The proposals from Greece were received positively by creditors who said the evaluation will be done urgently with the aim of reaching a deal later this week, suggesting that an end to a five-month long deadlock over releasing bailout aid to the cash-strapped country may be near.

Traders will be keeping a close eye on U.S. inventories reports. Analysts say U.S. inventories likely fell for an eighth week.

Light Sweet Crude Oil futures for August delivery, the most actively traded contract, gained $0.63 or 1.0 percent, to settle at $61.01 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for August delivery scaled a high of $61.42 a barrel intraday and a low of $59.55.

On Monday, crude oil for August delivery gained $0.41 or 0.7 percent, to settle at $60.38 a barrel, as traders warmed up to hopes of resolution to Greece's debt crisis following Athens' submission of some new proposals early Monday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.47 on Tuesday, up from its previous close of 94.32 on Tuesday in late North American trade. The dollar scaled a high of 95.64 intraday and a low of 94.30.

The euro trended lower against the dollar at $1.1162 on Tuesday, as compared to its previous close of $1.1341 in North American trade late Monday. The euro scaled a high of $1.1347 intraday and a low of $1.11136.

In economic news, a Commerce Department report on Tuesday showed new home sales with a further upside in May to reach its highest level in over seven years, after reporting a sharp jump in U.S. new home sales in the previous month. New home sales in May climbed 2.2 percent to an annual rate of 546,000 after surging 8.1 percent to the revised April rate of 534,000. Economists expected new home sales to rise to a rate of 525,000 from the 517,000 originally reported for the previous month, reflecting a 1.5 percent increase.

Separately, another the Commerce Department report on Tuesday showed new orders for U.S. manufactured durable goods fell more than expected in May, with orders for transportation equipment showing another steep drop. Durable goods orders tumbled 1.8 percent in May following a revised 1.5 percent decrease in April. Economists expected orders to dip by 0.6 percent compared to the 1.0 percent drop reported the previous month.

Elsewhere, the Chinese manufacturing sector continued to contract in June, albeit at a slower pace, HSBC Bank said Tuesday. The preliminary PMI score for June came in at of 49.6, a three-month high for the index. The reading also topped expectations of 49.4 and was up from 49.2.

Eurozone private sector growth hit a four-year high in June, reflecting broad-based upturn in services and manufacturing sectors, preliminary data from Markit Economics showed. The flash composite output index rose unexpectedly to a 49-month high of 54.1 in June from 53.6 in May. It was expected to ease slightly to 53.5.

British manufacturers reported a fall in orders for June largely due to some sluggish export demand, the latest Industrial Trends Survey from the Confederation of British Industry showed Tuesday. About 26 percent said total order books were below normal and 19 percent said they were above, giving a rounded balance of -7 percent in June. Economists had forecast a positive balance of 2 percent.