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U.S. oil edges higher after mixed economic data, supply report ahead

Published 05/29/2014, 10:05 AM
Nymex oil modestly higher after mixed U.S. economic data, supply report ahead
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Investing.com - West Texas Intermediate oil futures edged higher on Thursday, as investors digested a flurry of mixed U.S. economic data.

On the New York Mercantile Exchange, U.S. crude oil for delivery in July rose 0.31%, or 32 cents, to trade at $103.04 a barrel during U.S. morning hours.

Nymex oil held in a range between $102.62 and $103.19 a barrel. U.S. oil futures fell to $102.64 on Wednesday, the lowest since May 20, before settling at $102.72, down 1.34%, or $1.39.

New York-traded oil futures were likely to find support at $101.69 a barrel, the low from May 20 and resistance at $104.39 a barrel, the high from May 28.

The National Association of Realtors said earlier that its pending home sales index eased up by a seasonally adjusted 0.4% in April, below expectations for a 1% gain. Pending home sales in March rose by 3.4%.

A separate report released earlier showed that the U.S. economy contracted for the first time since 2011 in the first three months of the year, as an unusually harsh winter weighed on the economy.

The Commerce Department said gross domestic product contracted at a seasonally adjusted annual rate of 1% in the first quarter, worse than expectations for a decline of 0.5%. Preliminary data initially pegged U.S. growth at 0.1% in the first quarter.

At the same time, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 24 decreased by 27,000 to a seasonally adjusted 300,000 from the previous week’s revised total of 327,000.

Analysts had expected jobless claims to fall by 9,000 to 318,000 last week.

Nymex oil prices have been well-supported in recent weeks amid indications the U.S. economy is shaking off the effects of a weather-related slowdown over the winter. Wall Street expects second quarter growth to snap back with a 3.8% gain.

Investors now looked ahead to the release of weekly supply data out of the U.S. later in the session to gauge the strength of oil demand from the world’s largest consumer.

Thursday’s government report was expected to show that U.S. crude oil stockpiles rose by 500,000 barrels last week, while distillate stockpiles, including heating oil and diesel, was expected to increase by 750,000 barrels.

The report comes out one day later than usual due to the Memorial Day holiday in the U.S. on Monday.

After markets closed Wednesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 3.5 million barrels in the week ended May 23, compared to expectations for an increase of 1 million barrels.

The report also showed that distillate stocks increased by 0.9 million barrels, while gasoline stockpiles declined by 1.5 million barrels.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery advanced 0.38%, or 41 cents, to trade at $110.23 a barrel, while the spread between the Brent and U.S. crude contracts stood at $7.19 a barrel.

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