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Oil rises modestly after U.S. equity rally

Published 04/16/2013, 08:41 PM
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Investing.com - Oil futures are trading slightly higher in the early part of Wednesday’s Asian session as a sharp rally in U.S. stocks Tuesday lead to a modest increase in risk appetite following Monday’s plunge.

On the New York Mercantile Exchange, light, sweet crude futures for June delivery rose 0.21% to USD89.22 per barrel in Asian trading Wednesday after settling up 0.15% at USD89.16 a barrel on Tuesday in the U.S.

Data points out of the world’s largest economy helped oil to the upside. In economic news, the U.S. Labor Department said the consumer price index fell 0.2% last month after a 0.7% increase in February. Excluding volatile food and energy prices, the CPI rose 0.1% last month.

The U.S. Census Bureau said housing starts increased 7% last month from February to a 1.036 million seasonally adjusted annual rate. That is the first time in nearly five years monthly housing starts have eclipsed 1 million. In March, building permits fell 3.9% from February, to a 902,000 annual rate. The U.S. is the world’s largest oil consumer.

In addition, the Federal Reserve reported that U.S. industrial production rose 0.4% in March, beating expectations for a 0.2% gain after a 1.1% increase the previous month, which supported oil a bit.

On Monday, Goldman Sachs published a research note in which the bank’s analysts ended their bull call on Brent crude, citing the slack European economy. After peaking at USD118.90 per barrel in February, Brent has plunged, but Goldman did add the Brent market remains "tight".

Elsewhere, the U.S. Energy Information Administration said Tuesday that the U.S. exported an average of 9,000 barrels of crude per day to China in January marking the first time since 2005 the U.S. sent significant crude exports to China, the world’s second-largest oil consumer.

Meanwhile, Brent crude for June delivery rose 0.16% to USD100.13 per barrel on the ICE Futures Exchange.


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