14 May 2013, News Wires – UK Brent crude oil futures was steady near $103 per barrel, Tuesday, caught between hopes of a revival in demand growth after an unexpected jump in US retail sales and concerns about a rise in stockpiles in the world’s largest oil consumer.
The retail sales figures added to recent data pointing to underlying strength in the world’s biggest economy, but investors remain nervous about demand from the US and China amid already slowing consumption in Europe, Reuters stated.
Brent crude gained 7 cents to $102.89 per barrel by Tuesday morning, after settling down $1.09 on Monday. US oil gained 22 cents to $95.39, after ending 87 cents lower. Both contracts fell the most in nearly two weeks in the previous session.
“We are not 100% sure that the United States is on a path towards steady recovery because data is conflicting,” Reuters quoted Newedge Japan commodity sales manager Yusuke Seta as saying.
“On top of that, China is not looking good and Europe is not looking good. All this is keeping prices in check.”
Seta expected Brent to swing between $102 and $105 per barrel over the next few days because of the pull and push, with US oil hovering between $93 and $97 per barrel.
Oil has also slipped in recent sessions because of a stronger dollar, Reuters said. The dollar eased from a five-week high against a basket of major currencies on Tuesday as market players locked in profits ahead of a series of US economic data. A firm dollar pressures oil as its strength makes commodities more expensive for holders of other currencies.
“Expectations that the US economy is recovering are pushing up the dollar,” Seta said. “That in turn is weighing on oil and other commodities.”
US commercial crude oil stockpiles were seen slightly higher last week after hitting record high inventories over the previous two weeks while gasoline inventories were seen lower, a preliminary Reuters poll of eight analysts showed.
The survey, ahead of weekly inventory reports from the American Petroleum Institute and from the US Department of Energy’s Energy Information Administration (EIA), forecast that crude stocks would rise 200,000 barrels on average.
In the previous week, US crude oil inventories jumped to a fresh record high as domestic production continued to climb, data from the EIA showed.
Brent is expected to rise to $103.77 before dropping towards $101.35, while US oil may revisit its 10 May high of $96.24 before resuming its downtrend towards $93.58, according to Reuters technical analyst Wang Tao.