Investing.com - Crude oil futures edged higher during U.S. morning hours on Wednesday, holding on to gains after a U.S. government report showed both oil and gasoline supplies declined last week.
Market players also looked ahead to a second day of testimony by Federal Reserve Chairman Ben Bernanke, while upbeat U.S. housing data further dampened speculation over near-term easing in the U.S.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD89.32 a barrel during U.S. morning trade, adding 0.25%. Prices touched USD89.55 a barrel earlier in the day, the highest since May 30.
The August contract is due to expire on Friday, July 20.
Meanwhile, the more actively traded contract for September delivery eased up 0.25% to trade at USD89.76 a barrel. Earlier in the day, prices hit USD89.89 a barrel, the highest since May 30.
The September crude contract traded at USD89.75 prior to the release of the Energy Information Administration data.
The U.S. EIA said in its weekly report that U.S. crude oil inventories declined by 0.8 million barrels in the week ended July 13, compared to expectations for a decline of 1.1 million barrels. U.S. crude supplies fell by 4.7 million barrels in the preceding week.
Total U.S. crude oil inventories stood at 377.4 million barrels as of last week.
Total motor gasoline inventories decreased by 1.8 million barrels, compared to expectations for an increase of 1.1 million barrels, after rising by 2.75 million barrels in the preceding week.
Concerns over the outlook for the U.S. eased after official data showed that the number of U.S. housing starts rose more-than-expected in June, hitting the highest level since April 2010.
The Commerce Department said U.S. housing starts rose by 6.9% in June to a seasonally adjusted 0.760 million, compared to expectations for a gain of 5.2%.
Housing starts for May were revised up to 0.711 million units, up from a previously reported 0.708 million units.
The report said the number of building permits issued fell 3.7% in June to a 755,000 unit pace.
The data came one day after Fed Chairman Ben Bernanke offered a downbeat view of the U.S. economic outlook in testimony to the Senate, but failed to explicitly indicate if additional stimulus measures are imminent.
Bernanke was due to testify on the economy and monetary policy in front of the House Financial Services Committee on Wednesday.
The U.S. is the world’s largest oil consumer. Worries about the U.S. economy have been dominating market sentiment in recent weeks, alongside the ongoing debt crisis in the euro zone and China's cooling growth.
A broadly stronger U.S. dollar also weighed. The euro sank against the U.S. dollar after German Chancellor Angela Merkel said in an interview that she was not certain the European project would be successful, but reiterated that she was optimistic in spite of the current difficulties.
The yield on Spanish 10-year bonds was at 6.94%, nearing the critical 7% threshold widely viewed as unsustainable in the long run, amid fresh concerns over Madrid’s finances.
Also Wednesday, Germany auctioned more than EUR4 billion of two-year government bonds at negative yields for the first time at this type of auction, reflecting sustained investor concerns over the debt crisis in the region.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery jumped 0.8% to trade at USD104.86 a barrel, with the spread between the Brent and crude contracts standing at USD15.10.
London-traded Brent prices rose to as high as USD104.89 a barrel earlier in the day, the highest since May 30.
A fresh warning by Iran to block the Strait of Hormuz if its security is threatened supported Brent prices.
The U.S. Treasury and State Departments said late last week that it will target a number of banks and shipping companies it believes are being used to evade international sanctions on Iranian oil exports.
A European Union embargo on purchases of Iranian oil came into full effect on July 1.
Brent prices have been well-supported in recent sessions amid growing concerns over tightening supplies from Norway, outages in the North Sea region and following the launch of Western-led sanctions targeting Iranian oil exports on July 1.
Market players also looked ahead to a second day of testimony by Federal Reserve Chairman Ben Bernanke, while upbeat U.S. housing data further dampened speculation over near-term easing in the U.S.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD89.32 a barrel during U.S. morning trade, adding 0.25%. Prices touched USD89.55 a barrel earlier in the day, the highest since May 30.
The August contract is due to expire on Friday, July 20.
Meanwhile, the more actively traded contract for September delivery eased up 0.25% to trade at USD89.76 a barrel. Earlier in the day, prices hit USD89.89 a barrel, the highest since May 30.
The September crude contract traded at USD89.75 prior to the release of the Energy Information Administration data.
The U.S. EIA said in its weekly report that U.S. crude oil inventories declined by 0.8 million barrels in the week ended July 13, compared to expectations for a decline of 1.1 million barrels. U.S. crude supplies fell by 4.7 million barrels in the preceding week.
Total U.S. crude oil inventories stood at 377.4 million barrels as of last week.
Total motor gasoline inventories decreased by 1.8 million barrels, compared to expectations for an increase of 1.1 million barrels, after rising by 2.75 million barrels in the preceding week.
Concerns over the outlook for the U.S. eased after official data showed that the number of U.S. housing starts rose more-than-expected in June, hitting the highest level since April 2010.
The Commerce Department said U.S. housing starts rose by 6.9% in June to a seasonally adjusted 0.760 million, compared to expectations for a gain of 5.2%.
Housing starts for May were revised up to 0.711 million units, up from a previously reported 0.708 million units.
The report said the number of building permits issued fell 3.7% in June to a 755,000 unit pace.
The data came one day after Fed Chairman Ben Bernanke offered a downbeat view of the U.S. economic outlook in testimony to the Senate, but failed to explicitly indicate if additional stimulus measures are imminent.
Bernanke was due to testify on the economy and monetary policy in front of the House Financial Services Committee on Wednesday.
The U.S. is the world’s largest oil consumer. Worries about the U.S. economy have been dominating market sentiment in recent weeks, alongside the ongoing debt crisis in the euro zone and China's cooling growth.
A broadly stronger U.S. dollar also weighed. The euro sank against the U.S. dollar after German Chancellor Angela Merkel said in an interview that she was not certain the European project would be successful, but reiterated that she was optimistic in spite of the current difficulties.
The yield on Spanish 10-year bonds was at 6.94%, nearing the critical 7% threshold widely viewed as unsustainable in the long run, amid fresh concerns over Madrid’s finances.
Also Wednesday, Germany auctioned more than EUR4 billion of two-year government bonds at negative yields for the first time at this type of auction, reflecting sustained investor concerns over the debt crisis in the region.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery jumped 0.8% to trade at USD104.86 a barrel, with the spread between the Brent and crude contracts standing at USD15.10.
London-traded Brent prices rose to as high as USD104.89 a barrel earlier in the day, the highest since May 30.
A fresh warning by Iran to block the Strait of Hormuz if its security is threatened supported Brent prices.
The U.S. Treasury and State Departments said late last week that it will target a number of banks and shipping companies it believes are being used to evade international sanctions on Iranian oil exports.
A European Union embargo on purchases of Iranian oil came into full effect on July 1.
Brent prices have been well-supported in recent sessions amid growing concerns over tightening supplies from Norway, outages in the North Sea region and following the launch of Western-led sanctions targeting Iranian oil exports on July 1.