IV:WTI oil futures edge higher ahead of U.S. factory data
Investing.com - U.S. oil futures edged higher on the first trading day of the new year on Thursday, as market players looked ahead to key U.S. data later in the day to gauge the economic strength of the world’s largest oil consumer.
On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in February traded at USD98.91 a barrel during European morning trade, up 0.5%. New York-traded oil futures held in a range between USD98.54 a barrel and USD98.96 a barrel.
Nymex oil futures were likely to find support at USD98.15 a barrel, the low from December 31 and resistance at USD100.42 a barrel, the high from December 30. There was no floor or electronic trading on Wednesday because of the New Year’s Day holiday.
Trading volumes are expected to remain light due to the holiday period, reducing liquidity in the market and increasing volatility, which can help exaggerate market moves.
The U.S. Institute of Supply Management is to release its manufacturing PMI later in the session, while the Labor Department is to release its weekly report on initial jobless claims. The U.S. is also to publish data on construction spending.
Oil traders were also awaiting key U.S. weekly supply data, which was forecast to show a fifth consecutive weekly drop in crude stockpiles.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 5.7 million barrels in the week ended December 27.
The more closely-watched numbers from the U.S. Energy Information Administration have been delayed until Friday due to the New Year’s holiday.
U.S. crude futures, also known as West Texas Intermediate or WTI, have been well-supported in recent months amid indications the U.S. economy is gaining momentum.
Nymex oil prices ended 2013 with a gain of approximately 6%, the biggest annual advance since 2010.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for February delivery inched up 0.35% to trade at USD111.19 a barrel, while the spread between the Brent and U.S. crude contracts stood at USD12.28 a barrel.
London-traded Brent prices have been well-supported in recent weeks amid ongoing concerns over a disruption to supplies from Libya and South Sudan.
Oil traders shrugged off a pair of disappointing reports on the Chinese manufacturing sector. Data released earlier showed that China’s final HSBC Purchasing Managers Index inched down to 50.5 in December from a reading of 50.8 in November.
The report was published one day after a government report showed that China’s manufacturing purchasing managers' index fell to a four-month low of 51.0 last month from 51.4 in November and worse than forecasts for a decline to 51.2.
