WTI oil futures inch lower after previous session’s rally

Investing.com - U.S. oil futures inched lower on Thursday, as investors locked in gains from the previous day’s rally which took prices to a two-week high.

On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in March traded at USD94.10 a barrel during European morning trade, down 0.25%. New York-traded oil futures held in a range between USD94.02 a barrel and USD94.62 a barrel.

The March contract rallied to USD94.82 a barrel on Wednesday, the highest since January 3, before trimming gains to settle at USD94.35 a barrel.

Nymex oil futures were likely to find support at USD92.63 a barrel, the low from January 15 and resistance at USD95.73 a barrel, the high from January 3.

Wednesday’s gains came after government data showed that U.S. oil supplies fell significantly more-than-expected last week, easing concerns over a slowdown in demand from the world’s largest oil consumer.

The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 7.7 million barrels in the week ended January 10, compared to expectations for a decline of 0.6 million barrels.

Total U.S. crude oil inventories stood at 350.2 million barrels as of last week, the lowest since March 2012.

The report also showed that total motor gasoline inventories increased by 6.2 million barrels, above expectations for a gain of 2.5 million barrels.

U.S. oil prices received an additional boost after upbeat U.S. data bolstered sentiment on the economic outlook.

The Federal Reserve Bank of New York said that manufacturing activity in the New York-region expanded at the fastest pace since May 2012 in January as new orders rose sharply. A separate report showed that U.S. producer price inflation rose at the strongest rate in six months in December.

The upbeat data reinforced expectations that the U.S. economic recovery will continue to deepen going into this year and offset lingering concerns over last week’s surprisingly weak U.S. nonfarm payrolls report.

Market players looked ahead to key U.S. economic data later in the day for further indications on the strength of the economy and the future course of monetary policy.

The U.S. is to publish reports on consumer price inflation and initial jobless claims later in the session, in addition to data on manufacturing activity in Philadelphia.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for February delivery fell 0.65% to trade at USD105.60 a barrel, while the spread between the Brent and U.S. crude contracts stood at USD11.50 a barrel.

London-traded Brent prices have been under pressure in recent sessions as the prospect of a rise in Iranian oil exports weighed.