Crude Oil Ends Higher On Middle East Tensions

(RTTNews) - U.S. crude oil ended higher for a second straight session Friday, amid escalating tensions in Ukraine and Iraq. Concerns over possible supply disruptions of crude from the Middle East following U.S. President Barack Obama authorizing airstrikes on Iraqi militants aiding oil's uptick.

Investors also weighed the possible impact of Russia's retaliation to last week's sanctions by the Western countries and the resumption of fighting in the Gaza Strip after a three-day ceasefire. Earlier this week, Russia retaliated with a ban on import of agricultural produce from the U.S. and restricted import of fruits and vegetables from Europe.

Oil also found additional support on some encouraging economic news, with labor productivity in the U.S. increasing more than anticipated in the second quarter, as the jump in productivity contributed to a smaller than expected increase in labor costs. However, wholesale inventories in the U.S. rose less than expected in June, even as wholesale sales indicated only a modest increase, a report from the Commerce Department showed Friday.

Meanwhile, Chinese exports rose more than expected in July on strong foreign demand but weak domestic consumption dragged imports, taking the trade surplus to a record high.

Light Sweet Crude Oil futures for September delivery, the most actively traded contract, gained $0.31 or 0.3 percent to close at $97.65 a barrel on the New York Mercantile Exchange Friday.

Crude prices for September delivery scaled a high of $98.45 a barrel intraday and a low of $97.15.

On Thursday, crude oil futures ended higher following increasing tensions between Russia and the West over Moscow's involvement in Ukraine, as well supported by some upbeat economic data from the U.S. with first-time claims for U.S. unemployment benefits dropping more than expected last week.

In economic news from the U.S., labor productivity rose by a more than anticipated 2.5 percent in the second quarter, data released by the Labor Department showed. Economists expected an increase of 1.5 percent.

Unit labor costs were up 0.6 percent in the second quarter, notably lower than expectations for a 1.4 percent growth.

Wholesale inventories in the U.S. climbed by 0.3 percent in June, matching the downwardly revised increase seen in May. Economists had been expecting inventories to increase by about 0.6 percent compared to the 0.5 percent growth originally reported for the previous month.

The weaker than expected growth came as a 0.7 percent increase in inventories of durable goods was partly offset by a 0.2 percent drop in inventories of non-durable goods.

Wholesale sales in the U.S. inched up by just 0.2 percent in June following a 0.7 percent increase in May.

China's exports grew 14.5 percent year-on-year in July, more than double the 7.2 percent increase seen in June, the General Administration of Custom showed Friday. Shipments were expected to increase 7 percent. Meanwhile, imports declined 1.6 percent, reversing the 5.5 percent increase in June and confounded expectations for a 2.6 percent rise.

The Bank of Japan unanimously decided to maintain status quo position with respect to its monetary policy, the central bank stated on Friday after its two-day monetary policy meet. The central bank said it will continue to increase the monetary base at an annual pace of about JPY 60 trillion to JPY 70 trillion.