Crude Oil Climbs On US Data

Crude oil continues to trade positively this morning, as investors weighed the outlook for the market following positive US economic data and a forecast for lower global demand growth. US crude oil is trading at 93.32 gaining 29 points in the Asian session. Brent crude oil prices rose toward $110 per barrel on Thursday, rebounding after four days of losses, on reports of a recovery in the US labor market.

Crude oil were higher yesterday, after data showing that U.S. jobless claims fell unexpectedly last week added to signs of a strengthening economic recovery. Separate reports showed that producer price inflation in the U.S. rose in line with expectations in February, while core prices inched up slightly. The Bureau of Labor Statistics said that producer prices rose by a seasonally adjusted 0.7% in February, in line with expectations, after rising 0.2% in January. The core producer price index eased up 0.2% in February, in line with expectations after rising 0.2% in January. The unexpectedly strong data, together with recent upbeat data on nonfarm payrolls and retail sales fuelled optimism over the strength of the U.S. economic recovery. The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand. Oil’s gains were limited as concerns over the global economic outlook remained after Chinese data released over the weekend showed consumer inflation accelerated sharply in February, while industrial production slowed to the lowest level since October 2009.

This morning the US dollar is being sold off after hitting a recent high as trader take advantage of its strength to book profits and to move off to higher risk or to the sidelines ahead of today’s slew of economic releases and next week’s FOMC decision.

The Organization of Petroleum Exporting Countries will increase shipments this month as refineries in Europe and the U.S. resume operations after maintenance, according to Oil Movements. The group that supplies about 40 percent of the world’s oil will bolster crude shipments by 300,000 barrels a day, or 1.3 percent, to 23.75 million barrels a day in the four weeks to March 30, the researcher said today in an e-mailed report.

Natural gas jumped 3.6% to close at a 16-week high of $3.812 per mmbtu, after government data showed inventories dropped by more than expected last week. Natural gas storage dropped by 145bn cubic feet to 1.938 trillion cubic feet on March 8, 18.5% below the year-earlier level and 11.4% above the five-year average. Natural gas is expected to go up as cold weather has returned and is expected to continue for the next week which will boost the heating demand for natural gas and support prices.