By Myra P. Saefong and Barbara Kollmeyer, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil prices edged higher Friday, finding support after an Obama administration official denied a report that the U.S. and U.K. had agreed to release strategic oil reserves and as traders weighed an unexpected fall in U.S. consumer sentiment.
“The light commercial buying is likely in response to price. Nothing in the economic reports indicate fundamental support,” said Darin Newsom, a senior analyst at Telvent DTN.
April futures for light, sweet crude CLJ2 +0.80% rose 72 cents, or 0.7%, to $105.83 a barrel on the New York Mercantile Exchange. Prices traded around 1.5% lower week to date.
On Thursday, the front-month contract fell 32 cents but ended well off the day’s $103.78 low as prices swooned on the heels of a Reuters report that the U.K. and U.S. had discussed the possibility of releasing strategic oil reserves to ease the burden from rising crude and gasoline prices.
At a briefing Thursday, a White House spokesman said that President Barack Obama and U.K. Prime Minister David Cameron discussed energy issues, but they hadn’t reached any agreement on crude reserves.
The news “might have been just an attempt to spread market rumors to help take the steam out of oil prices,” said analysts at JBC Energy, in emailed comments. “On the other hand, given that high oil prices are a heavy burden for struggling OECD economies, it cannot be excluded that action will be taken.”
The analysts also said the release of reserve stocks wouldn’t be justified from a supply-vs.-demand view, at least for the second half of this year, citing expectations that global crude stockpiles will increase in line with seasonally lower demand through June as well as “diminished consumption due to a weak economy.”
Still, the “perception of a burgeoning recovery and possible supply disruption must be weighed against the release of strategic supplies and ill economic winds from Europe,” said Editor in Chief Michael Fitzpatrick, in the latest Kilduff Report.
Consumer sentiment dipped to 74.3 in a preliminary reading for March from a final level of 75.3 for February, according to the University of Michigan and Thomson Reuters Friday. Economists polled by MarketWatch had expected a March reading of 76.5. Read about consumer sentiment.
Data released earlier Friday from the Labor Department showed that U.S. consumer prices increased by 0.4% in February, with core prices rising 0.1% on a seasonally adjusted basis. Economists surveyed by MarketWatch had forecast a 0.5% increase in the CPI, with a 0.2% rise in the core rate.
Also Friday, the Federal Reserve reported that output of the nation’s factories, mines and utilities was unchanged last month, below Wall Street expectations of a 0.4% gain. Read more on industrial production.
Energy traders also kept watch on the doings in currencies. The ICE dollar index DXY -0.62% , which tracks the dollar against a basket of six other currencies, fell to 79.747, up from 80.158 in late North American trading on Thursday.
Rounding out the energy futures, April heating oil HOJ2 +1.32% rose 3 cents to $3.26 a gallon and April gasoline RBJ2 +1.28% climbed 3 cents to stand at $3.32 a gallon.
April natural gas NGJ12 +1.67% tacked on 3 cents, or 1.3%, to $2.31 per million British thermal units. Read about the prospects for natural gas.
