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Crude Oil Ends Lower On Strong Dollar, Upbeat Data; Down 5.6% For Week

Crude Oil Ends Lower On Strong Dollar, Upbeat Data; Down 5.6% For Week
2/28/2013 2:56 PM ET

U.S. crude oil settled lower Thursday, on a strong dollar and demand concerns after the Energy Information Administration report yesterday showed crude stockpiles in the U.S. to have increased last week. Concerns over the eurozone and the sequestration debate also weighed on oil prices. Nonetheless, the losses were somewhat checked with some upbeat macroeconomic data from the U.S. and rising equity markets. Oil prices shed over 5 percent in February.

Light Sweet Crude Oil futures for April delivery, the most actively traded contract, dropped $0.71 or 0.8 percent, to close at $92.05 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for April delivery scaled a high of $93.18 a barrel intraday and a low of $92.16.

In February, oil prices shed 5.6 percent.

Yesterday, oil settled a shade higher on some upbeat global macroeconomic data, even as the political situation in Italy eased. Investors largely ignored an Energy Information Administration report that showed U.S. stockpiles to have increased lesser than expected last week.

The EIA on Wednesday revealed that U.S. crude oil inventories moved up 1.1 million barrels, while gasoline stocks shed 1.90 million barrels in the weekended February 22. Analysts expected crude oil inventories to add 2.5 million barrels and gasoline stocks to decline 1 million barrels last week.

The euro traded lower against the dollar at $1.3071 on Thursday, as compared to $1.3136 late Wednesday in North America. The euro scaled a high of $1.3161 intraday and a low of $1.3058.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.88 on Thursday, up from 81.57 late Wednesday in North American trade. The dollar scaled a high of 81.92 intraday and a low of 81.47.

In economic news, a U.S. Commerce Department report on Thursday showed the country's GDP increased at an annual rate of 0.1 percent in the fourth quarter compared to the 0.1 percent drop that was originally reported. Economists had been expecting a more substantial upward revision, with the consensus estimate for the revised report to show 0.5 percent growth.

Separately, the U.S. Labor Department said initial jobless claims dropped to 344,000, a decrease of 22,000 from the previous week's revised figure of 366,000. Economists expected jobless claims to edge down to 360,000 from the 362,000 originally reported for the previous week.

Chicago-area business activity unexpectedly increased at a faster rate in February, a report from the Institute for Supply Management - Chicago showed Thursday. The business barometer, at its highest in almost a year, rose to 56.8 in February from 55.6 in January, with a reading above 50 indicating an increase in business activity. Economists expected the barometer to edge down to 55.0.

Elsewhere, inflation in the euro area, as per the harmonized index of consumer prices, weakened in January as estimated earlier, final data from statistical office Eurostat showed. The harmonized index of consumer prices (HICP), measured under the EU methodology, increased 2 percent on an annual basis in January, after rising 2.2 percent in December. The latest figure matched preliminary estimates.

German unemployment declined unexpectedly by 3,000 in February from the prior month, the Federal Labor Agency said. However, the jobless rate held steady at 6.9 percent in February, above the consensus forecast to 6.8 percent.

Germany's EU harmonized inflation slowed less than economists expected in February, latest data showed. Inflation as per the harmonized index of consumer prices dropped to 1.8 percent in February from 1.9 percent in January, preliminary data from the Federal Statistical Office showed. Economists had forecast a faster deceleration to 1.7 percent.

by RTT Staff Writer

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