Eyes On Data, G20 And Iran; Crude Steady Around $97.10

Crude oil rose yesterday to the highest of $98.09 amid indications that the global economic recovery is gaining strength after the eurozone’s industrial output rose in December, for the first time in four months while the U.S. retail sales rose as expected.

However, optimism that global oil consumption will rise was offset by the International Energy Agency ( IEA ) which cut its 2013 demand growth forecast by 90,000 barrels per day to 840,000 bpd, contradicting a rise in forecast by OPEC and the EIA earlier this week.

Adding to the downside pressures on oil prices on was the rise in the U.S. crude production to a 20-year high, the progress in talks between Iran and the UN nuclear inspectors and the unexpected drop in Japan’s GDP .

Growth in the world’s third-biggest oil use, Japan, contracted an annualized 0.4 percent in the three months through December, following a revised 3.8 percent contraction in the previous quarter, while Bank of Japan kept its monetary policy unchanged .

Thereby, crude oil fell yesterday to the lowest of $96.63 and as of this writing is moving in a tight range around the $97.15 , with the highest at $97.24 and the lowest at $97.06 as investors are reluctant to take big positions ahead of key events today .

Investors are waiting the outcome of the meeting of finance ministers and central bankers of the G20 countries that starts today and which may throw more light on the outlook for the global economy.

Oil prices may find support today from the increasing unrest in Syria , geo-political tensions after the nuclear test by North Korea and the fall in the U.S. jobless claims. However, the possible contraction in the eurozone’s GDP may weigh on prices.

Volumes continued to be lower than usual in Asia as markets in China still closed for the Lunar New Year , while the U.S. Energy Information Administration (EIA) showed yesterday that crude inventories only rose 560,000 barrels from the 2.2 million expected.

Brent is trading as of this writing around the $118.05 after rising 0.14%; natural gas is trading at $3.296 per 1,000 cubic feet after falling 0.30%; gasoline is trading at $3.0485 a gallon after rising 0.43%; heating oil is trading at 3.2216 after rising 0.09%.