This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Oil Off Highs After China Yuan News

NEW YORK (TheStreet) -- Stocks weren't the only assets getting a lift from China's yuan revaluation announcement, as oil, too, rallied on the news. But crude futures pulled back at midday as investors reevaluated the repercussions.

On Saturday, China said it will allow the yuan to appreciate against the dollar following a two-year peg to the greenback. The peg has lent a hand to Chinese exporters of late by keeping costs of their goods artificially deflated. But as one of the globe's largest end users of oil, the currency loosening would make the price of overseas goods, particularly dollar-dominated crude, more enticing.

The headline helped propel crude prices in the morning. But the rally began petering out alongside stocks at midday. Phil Flynn, energy analyst at PFGBest, described the mood as "anticlimactic," saying market participants realized the move was not completely unexpected and many may have already priced it in. China's decision also raises some issues in his mind.

"Number one, if you look at the move on the face of it, it's good for commodities because it makes commodities cheaper in China and increases our exports. But if you think about it, it'll slow down China's exports, which could slow down growth," Flynn said. "I don't think the move is as bullish as people think."

The July crude oil contract, which had traded near the $79 a barrel mark earlier, was recently improving 38 cents at $77.56, while the more actively traded August delivery contract was gaining 13 cents at $78.30.

The dollar had been trading weaker against a group of currencies earlier in the session, but the dollar index was advancing 0.2% of late.

Energy stocks were helping lead the major averages higher today, as the NYSE Arca Oil index was up 0.6% and the Philadelphia Oil Service Sector index rose 0.3%. On the Dow, shares of Chevron (CVX) and Exxon Mobil (XOM) were trading 1% and 0.9% higher.

In further developments following the BP (BP) oil spill in the Gulf of Mexico, the Sunday Times in London reported that BP will try to raise $50 billion to cover liabilities connected with the disaster. Separately, the firm said that costs associated with the spill have reached $2 billion thus far. Making matters worse on the public relations front, CEO Tony Hayward drew criticism for spending time at a yacht racing event Saturday in England.

Stock quotes in this article: BP, XOM, CVX, ACY 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,514.37 +65.12 0.40%
S&P 500 1,879.55 +7.66 0.41%
NASDAQ 4,161.4580 +39.9120 0.97%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs