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Crude gains on cold weather, shrugs off negative data

Published 02/13/2014, 01:41 PM
Updated 02/13/2014, 01:41 PM

Investing.com - Crude prices shrugged off a soft U.S. data and rose on sentiments that an intense winter storm trekking across the eastern seaboard will hike demand for heating oil.

On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in March traded at USD100.54 a barrel during U.S. trading, up 0.17%. New York-traded oil futures hit a session low of USD99.41 a barrel and a high of USD100.65 a barrel.

The March contract settled up 0.43% at USD100.37 a barrel on Wednesday.

Nymex oil futures were likely to find support at USD99.11 a barrel, Monday's low, and resistance at USD101.38 a barrel, Wednesday's high.

Oil prices shrugged off weak U.S. data betting that households across the eastern U.S. have been ramping up on their heating due the latest of many powerful winter storms that have ploughed across the country in 2014.

Elsewhere, oil continued to applaud data released on Tuesday revealing that China’s trade surplus widened to USD31.86 billion last month from a surplus of USD25.6 billion in December, beating estimates for a USD23.65 billion surplus.

Chinese exports climbed 10.6% from a year earlier, beating expectations for a 2% increase and following a 4.3% gain in December. Imports rose 10%, compared to forecasts for a 3% increase.

According to the report, China imported a record-high 28.16 million metric tons of crude oil in January, equivalent to 6.66 million barrels a day.

China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

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Soft U.S. data failed to cap gains due to the monetary implications of a U.S. recovery still battling headwinds.

The Commerce Department reported earlier that U.S. retail sales fell 0.4% in January, confounding expectations for a 0.3% increase. December’s figure was revised down to a decline of 0.1% from a previously reported 0.2% increase.

Core retail sales came in flat in January compared to expectations for a 0.1% rise.

Elsewhere, the Department of Labor reported that the number of individuals who filed for unemployment assistance in the U.S. last week rose by 8,000 to 339,000 from the previous week’s total of 331,000.

Analysts had expected jobless claims to fall by 1,000.

The disappointing data fueled expectations that U.S. economic recovery still faces potholes and that the Federal Reserve will take its time dismantling its USD65 billion bond-buying program.

Fed asset purchases weaken the greenback by suppressing interest rates, which tends to bolster assets like commodities by making them more attractive on dollar-denominated exchanges.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for April delivery were up 0.20% and trading at 108.57 a barrel, while the spread between the Brent and U.S. crude contracts stood at 8.03 a barrel.

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