The price of crude oil moved up above the $100-mark Wednesday morning on concerns about the Middle East supply situation after Egyptian President Mohammed Morsi rejected calls for his resignation.
Light Sweet Crude Oil (WTI) futures for August delivery, gained $1.32 to $100.92, levels not seen since early May 2012.
Yesterday, oil jumped to a 14-month high ahead of the weekly inventories data amid concerns over supply disruption from the Middle East and Africa. Oil output in Libya fell drastically as protesters shut several oilfields, even as tensions escalated in Egypt following anti-government demonstrations with the army threatening to intervene. Oil prices firmed further on some upbeat factory orders data from the U.S. even as the dollar strengthened, recording its highest close since May 2012.
Tuesday after the market hours, the API said US crude oil inventories fell 9.40 million barrels against analysts' expectations for a draw down of 2.3 million barrels. The API said gasoline inventories last week fell by 200,000 barrels.
This morning the U.S. dollar was trading steady near its one-month high versus the euro, sterling and the Swiss franc. The buck was ticking lower versus the yen.
In economic news, euro zone's private sector contraction eased in June, amid slower declines in employment and new orders, final results of a survey by Markit Economics showed. The composite output index, that measures both manufacturing and service sector activities, rose to 48.7 in June from 4.7.7 in May. The score was a tad below the flash estimate of 48.9, meaning the contraction was steeper than estimated.
Meanwhile, retail sales in the euro area returned to growth in May after falling for three months in a row, and the rate of growth far exceeded economists' expectations, latest data showed. Retail sales increased 1 percent on a monthly basis in May, recovering from April's upwardly revised 0.2 percent decrease, statistical office Eurostat said. Economists had forecast sales to record a 0.3 percent growth following April's originally reported 0.5 percent contraction.
The Germany service sector returned to growth in June after shrinking in the previous two months, but the rate of growth was slower than initially estimated, final data released by Markit Economics and BME showed. The seasonally adjusted purchasing managers' index for the service sector rose to a three-month high of 50.4 in June from 49.7 in May, moving above the no-change 50 mark - which separates growth from contraction - for the second successive month. The revised score was, however, notably lower than 51.3 estimated earlier.
Traders will look to the private sector employment data from the ADP, due out at at 8.15 a.m ET. Economists expect the private sector to have added 165,000 in June compared to the 135,000 jobs added in May.
The Commerce Department is set to release its trade balance report for May at 8:30 am ET. The consensus estimates call for a deficit of $40.8 billion for May, wider than the $40.3 billion deficit reported for April.
Simultaneously, the Labor Department will release its jobless claims report for the week ended June 29. Economists expected claims to have declined to 345,000 in the week from 346,000 in the previous week.
Later during the session, the Institute for Supply Management is due to release the results of its non-manufacturing survey. Economists expect the index to have risen to 54.5 in June from 53.7 in May.
Today during trading hours, the EIA will release its US crude oil inventories data for the weekended June 28. Analysts expect crude oil inventories to dip 3 million barrels last week.
