U.S. crude oil settled at a four-month high Tuesday, mainly on supply concerns with the continued geopolitical tensions prevailing in the Middle East, specifically in Algeria and Egypt, which has threatened to disrupt oil outflow. Investors largely ignored some weak consumer confidence data out of the U.S., even as they await the outcome of the Federal Reserve’s policy meet due later this week.
The dollar continued to trade lower against a basket of major currencies, making it cheaper for holders of other currencies to buy commodities traded in dollar such as oil.
Light Sweet Crude Oil futures for March delivery, the most actively traded contract, gained $1.13 or 1.2 percent, to close at $97.57 a barrel on the New York Mercantile Exchange Tuesday.
Crude prices for March delivery scaled a high of $97.82 a barrel intraday and a low of $96.23.
Yesterday, oil settled firm near a 4-month high mostly on supply concerns linked to the situation in the Middle East with news reports of a pipeline blast in Algeria. The continued clashes between protestors and police in Egypt stoked fears that oil transit through the country could be disrupted.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.58 on Tuesday, down from 79.77 late Monday in North American trade. The dollar scaled a high of 79.86 intraday and a low of 79.54.
The euro traded higher against the dollar at $1.3484 on Tuesday, as compared to $1.3455 late Monday in North America. The euro scaled a high of $1.3495 intraday and a low of $1.3416.
In economic news from the U.S., a report from the Conference Board revealed that its consumer confidence index tumbled to 58.6 in January from an upwardly revised 66.7 in December. The steep drop came as a surprise to economists, who had expected the index to come in unchanged compared to the 65.1 originally reported for the previous month.
A report by Standard & Poor’s on Tuesday showed the S&P/Case-Shiller 20-City Composite Home Price Index rose by a seasonally adjusted 0.6 percent in November following a revised 0.6 percent increase in October. Economists expected home prices to increase by 0.7 percent, matching the growth originally reported for the previous month. On a non-seasonally adjusted basis, the 20-City Composite Home Price Index edged down by 0.1 percent in November compared to a 0.2 percent drop in October.
From the eurozone, German consumer confidence will likely improve marginally in February, a survey by market research group GfK showed. The consumer confidence index for February rose to 5.8 from 5.7 in January. Economists expected the index to remain unchanged at the January level. According to the survey, income expectations and willingness to buy have improved noticeably in January and the economic outlook is also a little less pessimistic than in the previous month.
Later today, the American Petroleum Institute will release its US crude oil inventories report for the week-ended January 25.
by RTT Staff Writer
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