The price of crude oil was extending gains Tuesday morning amid escalating tension in the Middle East following Iran's nuclear programme, and North Korea's third nuclear test. Meanwhile, the OPEC in its monthly oil market report nudged up 2013 global oil demand growth forecast to 0.80 mbd.
Light Sweet Crude Oil (WTI) futures for March delivery, edged up $0.29 to $97.32 a barrel. Yesterday, oil settled higher as traders were upbeat over demand growth prospects in China after some strong data last week showed more-than-expected imports in January, indicative of increased consumption in the world's second largest economy. Oil prices were also impacted after the euro gained strength over the dollar on comments from Jens Weidmann, chief of Germany's Bundesbank and a European Central Bank governing council member that there were no data to support the euro is overvalued. Weidmann's remarks came in the wake of French President Francois Hollande's call for an exchange-rate mechanism to protect the euro from market volatility.
This morning, the U.S. dollar was hovering around its 3-week high versus the euro, while advancing toward a 6-month high against sterling. The buck was extending its two-and half year high versus the yen and ticking higher against the Swiss franc.
In economic news from the euro zone, U.K. inflation has been at 2.7 percent since October, the Office for National Statistics reported. This was the longest period for which consumer price growth has remained unchanged, it said. The rate continues to hover above the central bank's 2 percent target.
Separately, the statistics office said UK output price inflation eased to 2 percent in January from 2.2 percent in December. On a monthly basis, the output price index rose 0.2 percent. Both the figures matched economists' forecasts.
Today after the market hours, the API will release its US crude oil inventories report for the weekended February 08.
by RTT Staff Writer
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