RTTN: OIL FUTURES: Crude Rises on Strong U.S. Retail Sales
By John M. Biers
NEW YORK--Oil prices rallied Tuesday following strong U.S. retail sales figures and respectable economic results out of major European economies, which reignited bullish sentiment among some market participants.
Nymex front-month oil futures were trading at $93.77 a barrel, up $1.04, or 1.1%. Brent futures were up 10 cents to $ 113.70 a barrel.
The increase came after reports that U.S. retail sales rose for the first time in four months in July, a sign consumers may start spending at a slightly faster pace despite concerns about the economy. Strong retail sales are a sign of economic growth that could spur demand.
Retail and food service sales increased 0.8% last month to a seasonally adjusted $403.93 billion, the Commerce Department reported Tuesday. That was the biggest jump since February.
Economists surveyed by Dow Jones Newswires had forecast a 0.2% rise.
Also Tuesday, Germany's gross domestic product rose 0.3% on the quarter, compared with expectations of 0.2% growth. France reported flat growth for the third quarter in a row. A Bank of France business survey last week forecast a 0.1% GDP contraction in the third quarter.
The reports of strong retail sales and the results from France and Germany come on the heels of some other bullish signs in recent days.
Renewed tensions between Iran and Israel and the burgeoning crisis in Syria have revived concerns about the security of oil supplies from the critical Middle East region. Also, a heavy maintenance schedule for North Sea oil fields has tightened supplies in that market.
"It still feels like a market capable of achieving new high territory, especially if the macro factor remains tilted upward," Jim Ritterbusch, head of oil-trading adviser Ritterbusch and Associates, said in a client note.
John Kilduff, a trader at Again Capital, said the market is also gearing up for a heavy draw when the report on U.S. oil inventories is released Wednesday. U.S. oil inventories have dropped by larger-than-expected amounts the last two weeks.
"I do think we're on our way to $100 a barrel in fairly short order," Mr. Kilduff said.
Carl Larry of Oil Outlooks and Opinions, a research and consulting firm, said better economic data would lead oil higher.
Oil "has to go over $100," Mr. Larry said. "There's nowhere else to go."
-Jeffrey Sparshott, Sarah Portlock, William Horobin and Christopher Lawton contributed to this report.
