Crude oil was struggling to move higher Tuesday morning as traders fret over the developments in the euro zone after Greek leaders said they would form a group to renegotiate the agreed austerity measures.
Light Sweet Crude Oil (WTI) futures for July edged up $0.13 to $83.40 a barrel. Yesterday, oil ended lower on demand growth concerns as euro zone financial woes continued unabated. Investor concerns rose as yields at bond auctions in Span and Italy scaled record levels, notwithstanding some positive results from the Greek parliamentary elections.
This morning, the U.S. dollar was trading flat versus the euro, while ticking higher against sterling. The buck was edging lower versus the yen and the Swiss franc.
In economic news from the euro zone, U.K. annual inflation slowed unexpectedly in May to the lowest since November 2009, the Office for National Office said. Annual inflation eased to 2.8 percent, largely due to the slower increases in food and non-alcoholic beverage prices. Economists were expecting the rate to remain unchanged at 3 percent in May. Nonetheless, inflation continues to hover above the 2 percent target.
Meanwhile, survey results published by the Center For European Economic Research (ZEW) showed that German economic expectations declined more than expected in June. The ZEW Indicator of Economic Sentiment for Germany decreased by 27.7 points to a level of minus 16.9 points in June. This is the indicator's strongest decline since October 1998. Economists had forecast a decline to 2.3.
Traders will look to the report on housing starts and building permits from the U.S. Commerce Department, due out at 8:30 am ET. Economists estimate housing starts for May to come in at 720,000, while building permits are expected to have improved to 736,000. In April, housing starts rose 2.6 percent to 717,000, while building permits fell 7 percent to 715,000.
Today after the market hours, the API will release its U.S. crude oil inventories report for the weekended June 15. Analysts expect crude oil inventories to decline by 1.0 million barrels and gasoline stocks to increase by 1 million barrels last week.
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