Ahead Of EU Summit, Crude Rises

Crude found support from the upbeat U.S. retail sales that strengthened the outlook for recovery in the world’s largest oil consumer, yet the stronger U.S. dollar, the EU summit, IEA’s outlook and the rise in U.S. stockpiles are all weighing on prices.

The Dow Jones only rose 5.22 points on Wednesday yet it hit another record high for the ninth straight session, which is the first nine-day rally since 1996, after the U.S. retail sales expanded at their fastest pace in five months in February.

Hopes the U.S. economy can cope with the tax hikes and spending cuts kicking-in this year pushed the U.S. dollar near its highest in seven months against a basket of currencies around 82.90, which may limit crude’s gains as it makes oil more expensive.

- Crude oil is trading as of this writing around the $92.95 a barrel level compared with the opening at $92.36, while the highest is at $92.99 and the lowest is at $92.16

- Brent is trading as of this writing around the $108.77 a barrel after rising 0.23%

Outlook Cut
Weighing on prices might be the International Energy Agency (IEA), which cut its global demand outlook for a second month, while U.S. crude stockpiles climbed 2.62 million barrels from an expected rise of 2.3 million barrels.

The U.S. Energy Information Administration (EIA) showed that crude inventories rose to384 million last week the highest for the time of year, while gasoline inventories fell 3.6 million barrels and distillates, including heating oil and diesel, rose 83,000 barrels.

Chinese Demand
Adding to the downside pressures on oil prices is concerns over demand from China, the world’s second largest oil consumer, after comments from the central bank that reinforced worries it may drop its pro-growth policies.

A lot of people have been pricing in a strong pickup in oil demand from China this year and some of those expectations may be pared back, said Natalie Rampono from ANZ in Melbourne.

Focus will turn today to Eurozone’s employment report as well as the U.S.’s jobless claims and current account; meanwhile, the European Union heads of state will gather in Brussels to discuss the region`s mounting problems.

- Natural gas is trading as of this writing at $3.697 per 3.643 cubic feet after rising 0.46%

- Heating oil is trading at $2.9338 a gallon after rising 0.33%

- Gasoline is trading as of this writing at $3.1426 a gallon after rising 0.01%