Friday Losses On Signs Of Slower US Activity

The unexpected drop in the US industrial production on Friday spurred concerns about lagging economic activity. Meanwhile, markets seem to be well supplied, compelling Saudi Arabia to cut crude shipments.

Output at U.S. factories fell 0.1% after a 0.4% gain in December. Saudi Arabia – the world`s top crude oil exporter – lowered its crude exports to 7.06 million barrels of crude a day in December, the lowest since September 2011, as markets are well supplied.

Despite the disappointing industrial data from the US, markets still expect the world`s two-leading economies to support global growth and commodity demand, limiting losses. The US housing data due this week will provide more cues on the nation’s economic health.

Meanwhile trading volumes will be thin Monday with the US markets closed for Presidents Day.

- Crude April-contract oil dropped Monday morning trading as of this writing around the $ 96.17 a barrel compared with the opening at $96.37

- The highest for crude as of this writing is at $96.45 and the lowest is at $95.97

- Crude finds on the short-term support at $95.00 then at 94.70, resistance at $96.50 then at $97.00

Also limiting losses is the bright economic outlook for Japan, the world`s third largest oil consumer, which escaped direct criticism during the G20 indicating that the country’s expansive policies that support growth may continue.

- Brent is trading as of this writing around the $117.79 after rising 0.11%

Caution will persist this week, as geopolitical tensions over North Korea continue while investors are eyeing the talk scheduled for February 26 between Iran and major world powers for any progress on deadlock talks on Tehran`s nuclear program.

Reports indicate that the West plans to offer an easing of sanctions on trading gold and other precious metals with Tehran, in return for Iran shutting down its newly-expanded uranium enrichment plant.

- Natural gas is trading at the time of writing at $ 3.169 per 1,000 cubic feet after rising 0.51%

- Heating oil is trading at $ 3.2161 after rising 0.18%

- Gasoline is trading at the time of writing at $ 3.1452 a gallon after rising 0.34%

Markets are also eyeing a flurry of data from the eurozone this wee , with the PMI manufacturing and service, German economic surveys, the ZEW IFO and the European Central Bank winter 2013 economic forecasts.