Forexpros – Crude oil futures rose in Asian trading on Wednesday as investors snapped up nicely priced positions on sentiment that while key U.S. housing and confidence indicators came in a little soft, they were firm enough to reinforce optimism the U.S. economy is recovering.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in June traded at USD103.73 a barrel, up 0.17%, off from a session high of 103.83 and up from an earlier session low of USD103.57.
Lackluster data out of the U.S. wasn’t weak enough to fray nerves in energy markets.
The Standard & Poor’s/Case-Shiller house price index fell at an annualized rate of 3.5% in February from a year earlier, worse than expectations for a 3.4% decline.
New home sales in the U.S. fell by 7.1% to a seasonally adjusted 328,000 units in March, slightly better than expectations for a reading of 320,000.
Housing by its nature takes a while to bottom out before recovering, bumping along a bottom for months or even years in the process, and the data reinforced sentiments that in the U.S., the housing sector’s darkest days are in the past.
Consumer confidence, meanwhile, slipped in the world’s largest economy as well.
The Conference Board reported that its consumer confidence index fell to 69.2 in April from a downwardly revised reading of 69.5 in March and further below a 12-month high in February.
Analysts were hoping the index would rise to 69.7 in April.
However, Spain, Italy and the Netherlands successfully sold bonds prior to Asia’s opening, which calmed nerves on hopes that even though the continent’s debt crisis goes on, so does demand for government debt, which sent oil rising.
A European ban on Iranian oil imports continues to draw closer.
An embargo on Iranian crude that will take effect in July forms part of Western sanctions on Iran for its alleged nuclear weapons program.
Meanwhile the Federal Reserve is set to announce its latest decision on interest rates, and market hopes are building that while the U.S. central bank will keep interest rates low for a while, it won’t roll out extraordinary stimulus measures to jolt the economy.
The increasing positive take on the U.S. economy bolstered crude.
On the ICE Futures Exchange, Brent oil futures for June delivery were up 0.12% and trading at USD118.29 a barrel, up USD14.56 from its U.S. counterpart.
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