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Crude oil futures higher despite grim euro zone growth outlook

Published 02/14/2013, 04:10 AM
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Investing.com - Crude oil futures were higher during European morning hours on Thursday, despite data showing a worsening of the financial situation in the euro zone.

On the New York Mercantile Exchange, light sweet crude futures for delivery in March traded at USD97.31 a barrel during European morning trade, up 0.3% on the day.

New York-traded oil prices held in between a tight range of USD96.94 a barrel, the daily low and a session high of USD97.38 a barrel. Oil prices rose to USD98.09 a barrel on Wednesday, the strongest level since February 1.
    
Fresh euro zone concerns were sparked by official data showing that Germany’s economy, the bloc's largest, contracted by 0.6% in the in the fourth quarter, worse than expectations for a 0.5% fall, after a 0.2% expansion in the three months to September.

Separately, France’s economy also contracted more than forecast, with gross domestic product falling by 0.3%, from 0.1% growth in the third quarter. Economists had forecast a contraction of 0.2% in the fourth quarter.

Also Thursday, data showed that Italy’s economy shrank 0.9% in the three months ended December 31, worse than expectations for a 0.6% drop.

The euro zone was to release preliminary data on fourth quarter growth later in the session.

Meanwhile, in Japan, official data showed that the world’s third-largest economy contracted by 0.1% in the fourth quarter, compared to expectations for an uptick of 0.1%.

The downbeat global growth outlook prompted investors to shun riskier assets and move in to the relative safety of the U.S. dollar.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.3% to trade at 80.44.

Dollar-denominated oil futures contracts tend to fall when the dollar rises, as this makes oil more expensive for buyers in other currencies.

Market players also remained cautious ahead of a meeting of Group-of-20 finance ministers in Moscow later in the week, which was likely to feature discussions on competitive currency devaluation.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery added 0.25% to trade at USD118.18 a barrel, with spread between the Brent and crude contracts contracting to USD20.87 a barrel.

The spread widened to more than USD23 earlier in the week, as ongoing concerns over a glut of oil in the Midwest pressured New York-traded futures.

London-traded Brent futures rose to a nine-month high last week amid indications of strong demand from China and lingering worries about supply disruptions due to conflict in the Middle East and North Africa.

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