July 3, 2012, 2:48 a.m. ET
By Eric Yep
Wall Street Journal
Crude-oil futures edged higher in Asia Tuesday after a series of disappointing economic cues spurred hopes of more measures from global central banks to boost growth and due to developments in Iran.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at $84.22 a barrel at 0634 GMT, up $0.47 in the Globex electronic session. August Brent crude on London's ICE Futures exchange rose $0.63 to $97.97 a barrel.
"Disappointing global manufacturing data eroded some of the earlier market optimism related to the European Union summit announcements as people adjusted their expectations for further policy stimulus from the European Central Bank and Bank of England this week," Singapore-based OCBC said in a note.
Euro-zone manufacturing activity contracted sharply in June, and unemployment hit a record high, putting more pressure on the ECB to cut its key interest rate when it meets Thursday. The euro-zone's manufacturing purchasing managers' index was at 45.1 last month, unchanged from May's three-year low, while Germany's PMI slid to a three-year low of 45.
In the U.S., the manufacturing sector contracted in June for the first time since July 2009, with the manufacturing PMI falling unexpectedly to 49.7 last month from 53.5 in May. PMIs below 50 indicate a contraction.
In addition to the ECB rate decision on Thursday, investors will be watching U.S. employment data on Friday, among other economic data releases. U.S. markets will be shut Wednesday for Independence Day.
Meanwhile, the U.S. Energy Information Administration will be releasing weekly data Thursday that , according to estimates from five analysts, will likely show crude-oil inventories declined by 900,000 barrels in the week ended June 29. The American Petroleum Institute is due to publish its inventory estimates at 2030 GMT.
Oil prices are also supported by events in Iran, where the Revolutionary Guards Corps began drills Monday to test missiles a day after the EU's Iran embargo took effect. Iranian lawmakers have also drafted a bill to block the Strait of Hormuz to U.S. and European tankers.
"It is only a matter of time" before supply tightens, requiring higher oil prices to curb demand, Goldman Sachs said in a note. "Net, we continue to expect crude-oil prices to move higher in coming months, and we maintain our three-month Brent crude-oil price target of $120/bbl."
Nymex reformulated gasoline blendstock for August--the benchmark gasoline contract--rose 184 points to $2.6423 a gallon, while August heating oil traded at $2.6900, 141 points higher.
ICE gasoil for July changed hands at $861.00 a metric ton, up $12.00 from Monday's settlement.
