Crude Oil Ends Above $49 A Barrel, Despite Supply Surge

(RTTNews) - U.S. crude oil ended higher for a fourth straight session on Wednesday, despite the official weekly oil report from the Energy Information Administration showed crude stockpiles to have risen more than expected last week. It for an eleventh straight week oil stockpiles have increased in the U.S.

Oil prices also found support with the dollar weakening against a basket of major currencies after some disappointing durable goods data from the U.S. A run to 12-year highs for the dollar weighed on commodities for the past few months, but prices have risen this week as the buck relented versus the euro.

In economic news from the U.S., new orders for U.S. manufactured durable goods decreased unexpectedly in February, with orders for transportation equipment showing a notable pullback.

Analysts attribute the surge in oil prices to the ongoing chaos and fighting in Yemen which many believe is the beginning of a civil war in the troubled Middle-East country. Earlier in the week, Shiite rebels in Yemen urged its followers to fight forces loyal to the nation's embattled president in a bid to take full control. The development comes in wake of a U.S. decision to evacuate its troops from a southern airbase in Yemen after militants seized adjoining areas.

Earlier today, a weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have surged 8.2 million barrels in the week ended March 20, while analysts expected an increase of 4.6 million barrels.

The report showed U.S. crude oil inventories at 466.7 million barrels end last week. Stockpiles have been climbing every week since the week ended January 9.

Gasoline stocks dropped by 2.0 million barrels last week, with analysts anticipating a decline of 1.6 million barrels. Inventories of distillate, including heating fuel, remained unchanged, even as analysts estimated a drop of 1.7 million.

Hopes for increased demand and another few months of zero interest rates in the U.S. have also boosted commodities including oil.

That's despite further evidence that U.S. inventories are rising to unprecedented levels. Late Tuesday, the American Petroleum Institute said its data for last week showed a 4.8-million-barrel gain in crude-oil supplies.

Light Sweet Crude Oil futures for May delivery, the most actively traded contract, jumped $1.70 or 3.6 percent to settle at $49.21 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for May delivery scaled a high of $49.39 a barrel intraday and a low of $47.00.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.94 on Wednesday, down from its previous close of 97.23 on Tuesday in late North American trade. The dollar scaled a high of 97.30 intraday and a low of 96.54.

The euro trended higher against the dollar at $1.0966 on Wednesday, as compared to its previous close of $1.0926 in North American trade late Tuesday. The euro scaled a high of $1.1016 intraday and a low of $1.0901.

In economic news, a Commerce Department report on Wednesday showed new orders for U.S. manufactured durable goods unexpectedly decreased in February, with orders for transportation equipment showing a notable pullback. Durable goods orders fell 1.4 percent in February following a downwardly revised 2.0 percent increase in January. Economists expected orders to climb by 0.7 percent compared to the 2.8 percent jump reported for the previous month.

Elsewhere, German business morale improved for the fifth straight month to an eight-month high in March as firms expressed greater optimism about future developments. The business climate index rose more-than-expected to 107.9 in March from 106.8 in February, results of a survey by Munich-based Ifo Institute showed Wednesday. This was the highest score since July 2014 when the reading was 108. It was forecast to rise to 107.3.

French business confidence weakened in March but remained close to its long-term average, survey data from the statistical office Insee showed Wednesday. The business confidence index fell to 99 from 100 in February. It was forecast to remain unchanged at 100.

U.K. mortgage approvals rose to a five-month high in February, the British Bankers' Association reported Wednesday. The number of mortgages approved for house purchases rose to a seasonally adjusted 37,305 in February from 36,517 in January. This was the highest since September 2014. It was expected to rise slightly to 36,650.