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Crude oil gains on rising U.S. consumer sentiment

Published 06/28/2013, 01:09 PM
Updated 06/28/2013, 01:10 PM
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Investing.com - Crude prices rose in rather subdued trading on Friday, buoyed by rising consumer sentiment numbers in the U.S., which reflected an improving economy that will demand more fuels and energy going forward.

Comments from a Federal Reserve governor suggesting an end to monetary stimulus programs starting in September quieted trading as investors digested the news.

On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded up 0.27% at USD97.31 a barrel on Friday, off from a session high of USD97.82 and up from an earlier session low of USD96.55.

The Thomson Reuters/University of Michigan consumer sentiment index rose to 84.1 for a final reading in June, up from a 82.7 reading the previous month and also above expectations for a 82.8 reading.

The upbeat numbers came in wake of a report that revealed that the Chicago purchasing managers' index fell to 51.6 this month from 58.7 in May, exceeding expectations for a decline to 56.0.

Any reading over 50 signifies expansion, which left investors feeling at ease to seek out growth-sensitive energy positions.

Elsewhere in the U.S., Federal Reserve Governor Jeremy Stein suggested earlier Friday that asset purchases may begin to taper in September provided the economy improves, which boosted the dollar and swayed a few investors away from oil.

"The best approach is for the Committee to be clear that in making a decision in, say, September, it will give primary weight to the large stock of news that has accumulated since the inception of the program and will not be unduly influenced by whatever data releases arrive in the few weeks before the meeting — as salient as these releases may appear to be to market participants," Stein said, according to prepared remarks in a speech he gave earlier.

Stimulus tools such as a monthly USD85 billion bond-buying program tend to push oil up as a side effect by weakening the greenback, which makes the commodity attractive in dollar-denominated exchanges.

On the ICE Futures Exchange, Brent oil futures for August delivery were up 0.15% at USD102.98 a barrel, up USD5.67 from its U.S. counterpart.










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