Crude Oil Ends Above $97 As Distillate Stockpiles Decline

(RTTNews) - U.S. crude oil moved up for a fourth straight session to end at a three-week high on Thursday, after data from the official U.S. Energy Information Administration showed distillate stockpiles to have declined more than expected last week, not withstanding a better than expected rise in crude and gasoline inventories. Oil prices found additional support with the dollar weakening against some major currencies, making it attractive for buyers holding foreign currencies.

Earlier today, a report from the Energy Information Administration showed U.S. crude oil inventories to have climbed 1 million barrels for the week ended January 17, while analysts expected an increase of 0.6 million barrels. Gasoline stockpile rose 2.1 million barrels last week, while distillate stockpiles, which include diesel and heating oil, dropped by 3.2 million barrels. Analysts anticipated gasoline stockpiles to rise 1.7 million barrels with distillate inventories expected to decline by 1.2 million barrels.

Investors largely ignored some weak economic data from China, the second largest energy consumer. A key indicator of China's factory sector performance dropped sharply in January to a level indicating contraction in business activity, as the volume of new work inflow declined, flash results of a survey by Markit Economics and HSBC revealed Thursday.

Light Sweet Crude Oil futures for March delivery, the most actively traded contract, gained $0.59 or 0.6 percent to close at $97.32 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for March delivery scaled a high of $97.84 a barrel intraday and a low of $96.41.

Meanwhile, the the American Petroleum Institute late Wednesday indicated crude oil inventories to have jumped 4.9 million barrels, while analysts expected a 1.9 million barrels decline.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.50 on Thursday, down from its previous close of 81.19 late Wednesday in North American trade. The dollar scaled a high of 81.31 intraday and a low of 80.44.

The euro traded higher against the dollar at $1.3695 on Thursday, as compared to its previous close of $1.3547 late Wednesday in North America. The euro scaled a high of $1.3695 intraday and a low of $1.3531.

In economic news, first-time claims for U.S. unemployment benefits for the week ended January 18 edged up to 326,000, an increase of 1,000 from the previous week's revised figure of 325,000. Economists expected claims at 330,000 from the 326,000 originally reported for the previous week. Nonetheless, the less volatile four-week moving average dropped to 331,500 from the previous week's revised average of 335,250, hitting its lowest level since the first week of December.

Existing home sales in the U.S. rebounded in December after seeing a sharp drop the previous month, a report from the National Association of Realtors showed Thursday. Existing home sales climbed 1.0 percent to an annual rate of 4.87 million in December after tumbling 5.9 percent to a downwardly revised 4.82 million in November. Economists expected existing home sales to edge up to 4.93 million from the 4.90 million originally reported for the previous month.

Partly reflecting improvements in the financial components, a Conference Board report on Thursday its leading economic index edged up by 0.1 percent in December following an upwardly revised 1.0 percent increase in November. Economists expected a rise of about 0.2 percent compared to the 0.8 percent advance originally reported for the previous month.

Elsewhere, in China, the headline purchasing managers' index, a key indicator of China's factory sector performance, fell to a six-month low of 49.6 in January from 50.5 in December. An index reading above 50 indicates expansion of the sector while a reading below 50 suggests contraction. The contraction was attributed to a decline in the volume of new work inflow.

Eurozone's private sector growth accelerated more-than-expected in January, led by a further strong expansion in Germany, with both the manufacturing and service sectors recording above-trend improvement in business activity. The activity indicator for the euro area private sector climbed to 53.2 from 52.1 in December, and stayed above the no-change 50 mark for the seventh successive month. Economists expected the index to rise to 52.5.