Crude Oil Climbs On US Recovery

This week US markets will see a slew of housing data, but not until after the FOMC meeting which begins today and will conclude with Mr. Bernanke’s press conference tomorrow afternoon. Traders are unsure, what the Feds are thinking. There is a good possibility that the Fed might begin a slow easing of monetary stimulus reducing stimulus through 2014. Citing strong reports on employment, manufacturing and retail sales, the report says the U.S. has shown notable resilience amid higher taxes. The company nudged up its near-term growth forecasts, seeing 2.9% this quarter and 2% next.

For Goldman, that was enough to shorten their estimated lifespan on the Federal Reserve‘s bond-buying program. It sees the Fed concluding these purchases by the third quarter of 2014, three months ahead of its previous projection.

Crude oil climbed to trade over 94.00 a barrel on positive recovery in the US helps to support demand; housing is the last segment that needs to show a rebound. Traders will closely watch these releases this week, which could see crude oil climb as the economy recovers and demand is increased. Oil prices at $100 per barrel are a “reasonable” price that won’t choke global economic growth, Saudi Arabia’s Oil Minister Ali Al-Naimi said over the weekend, helping prices to gain.

The Home Builders’ index, a measure of confidence, slips this month to 44 from 46 in February, as current sales index fell four points. But the details were more encouraging. The report said the problem isn’t demand but the lack of buildable land, “along with rising costs for building materials and labor.” As those bottlenecks are cleared up, homebuilding should continue its gradual recovery and lend support to GDP growth this year.

The Commerce Department‘s report on home construction will be released later today. The median forecast of economists expects housing starts increased 3.0% in February, to an annual rate of 917,000. Building permits are forecast to rise to a pace of 925,000.

The strength of home demand will be the subject of Thursday’s report on existing home sales. Economists expect resales to rise 1.6% to a 5.0 million pace in February. Also the Federal Housing Finance Agency will report its January measure of home prices. Forecasters think prices of homes purchased nationwide edged up 0.9% in January, which would be the 12th consecutive increase in home values as measured by the FHFA.

U.S. natural gas ended higher as lower temperatures boosted the demand and supported prices. Natural gas is expected to move in a range as receding winter season and profit booking at such high levels can keep prices in range. Front gas futures ended up 1 cent at $3.882 after climbing early to $3.965, the highest since October 2011. Natural gas is trading this morning at 3.895 gaining 23 points in the Asian session.