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Crude oil steady ahead of central banks; U.S., China data in focus

Published 03/07/2013, 04:06 AM
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Investing.com - Crude oil futures were little changed during European morning hours on Thursday, as traders were hesitant to enter the market ahead of key policy decisions by the European Central Bank and the Bank of England later in the day.

Market players also awaited the release of key U.S. monthly jobs report on Friday as well as Chinese economic numbers due out Friday and Saturday to gauge the strength of the world’s two largest economies.

On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD90.56 a barrel during European morning trade, up 0.15% on the day.

New York-traded oil prices held in between a tight trading range of USD90.22 a barrel, the daily low and a session high of USD90.63 a barrel.

The ECB was widely expected to leave rates on hold at 0.75%, but concerns over the economic outlook for the region fuelled speculation over the prospect of future rate cuts.

Meanwhile, the pound fell to a two-and-a-half year low against the U.S. dollar ahead of the BoE’s policy meeting later Thursday, amid speculation over whether the central bank will resume its asset purchase program.

In a busy day for central banks, the Bank of Japan announced no changes to monetary policy at the conclusion of its policy meeting earlier in the day, but expectations for more aggressive easing measures in the future remained intact.

Oil traders are also focusing on the U.S. nonfarm payrolls employment report due Friday. On the same day, China will announce its trade data for February, which will be followed by inflation and industrial numbers over the weekend.

Weakness in the U.S. dollar supported prices. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.2% to trade at 82.38.

But a larger-than-expected increase in U.S. oil stockpiles weighed. The U.S. Energy Information Administration said Wednesday that crude oil inventories rose by 3.8 million barrels last week, significantly higher than expectations for an increase of 0.6 million barrels.

The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery dipped 0.1% to trade at USD110.99 a barrel, with spread between the Brent and crude contracts standing at USD20.43 a barrel.

Brent prices remained supported as a North Sea pipeline system remained shut for a fifth day after a platform leak.

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