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U.S. oil futures fall sharply, Brent rises in diverging trade

Published 08/09/2015, 15:33
Updated 08/09/2015, 15:37
© Reuters.  WTI, Brent oil futures diverge in choppy session
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Investing.com - Crude oil futures were mixed in choppy trade on Tuesday, as a refinery closure weighed on West Texas Intermediate prices while Brent futures rallied, tracking strong gains in global equity markets.

Crude oil for delivery in October on the New York Mercantile Exchange tumbled $1.23, or 2.67%, to trade at $44.80 a barrel during U.S. morning hours. U.S. markets were closed on Monday for the Labor Day holiday.

U.S. crude prices were weighed down by the closure of the largest crude distillation unit at Exxon Mobil (NYSE:XOM)'s 502,500 barrel-per-day Baton Rouge, Louisiana, refinery.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for October delivery tacked on 57 cents, or 1.21%, to trade at $48.21 a barrel.

Market sentiment was boosted amid a global stock market rally, as grim trade data from China boosted hopes for another round of stimulus from China's central bank.

China's trade surplus widened to $60.2 billion last month from $43.0 billion in July, compared to estimates for a surplus of $48.2 billion.

Exports slumped 5.5% from a year earlier, better than forecasts for a decline of 6.0%, while imports plunged 13.8%, far worse than expectations for a drop of 8.2%.

The disappointing data raised expectations of more policy easing from China's central bank in the coming months.

China's equity markets witnessed yet another choppy session which featured wild swings on Tuesday. The Shanghai Composite rallied more than 4.5% in the last hour of trade to erase the session's losses and end up 3%.

Volatility in Chinese stock markets in recent months has been a key theme for global markets amid concerns the world's second largest economy may be slowing more than expected.

The upbeat sentiment carried over to European markets, where Germany's DAX, France’s CAC 40 and London's FTSE 100 were all up nearly 2%.

In the U.S., Wall Street jumped after the open, with the Dow rallying more than 250 points, as traders returned to their desks from the Labor Day weekend in an upbeat mood.

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