Forexpros – Crude oil futures added to losses on Tuesday, after official data showed that U.S. core durable goods orders fell by the most in three years last month, but losses were limited ahead of a liquidity boosting operation by the European Central Bank and amid ongoing concerns over disruption to Iranian oil supplies.
On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD108.09 a barrel during early U.S. morning trade, shedding 0.43%.
It earlier fell by as much as 0.9% to trade at a session low USD107.63 a barrel. On Friday, prices rose to USD109.92 a barrel, the highest since May 4.
The U.S. Census Bureau said earlier that core durable goods orders tumbled by 3.2% in January, confounding expectations for a flat reading.
Durable goods orders, which include transportation items, fell for the first time in three months in January, plunging by a seasonally adjusted 4.0%, after rising by 2.1% in December.
Shipments of core capital goods decreased by 4.5% last month, compared to expectations for a 1.3% decline, after climbing by a revised 3.4% in December. The U.S. government uses the shipments data to help calculate gross domestic product.
The U.S. is the world’s largest oil consuming nation and manufacturing numbers are used as indicators for future fuel demand growth.
A separate report showed that U.S. home prices fell more-than-expected in December, declining for the 18th consecutive month.
Risk appetite remained supported as markets looked ahead to Wednesday’s launch of the ECB’s second three-year long-term refinancing operation, after a similar liquidity injection in December averted a credit crunch and eased pressure on peripheral euro zone bond markets.
Oil traders continued to monitor tensions between Iran and the West and a potential disruption to oil supplies from the region.
Growing tensions between Iran and Israel also remain in focus. There are fears that an escalation of hostilities between Israel and Iran could set off a conflict across the region and send oil prices skyrocketing.
Israel and the U.S. have previously stated that all options are on the table in ensuring the Islamic Republic does not acquire atomic weapons.
Meanwhile, markets were awaiting fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 1.2 million barrels last week to hit a five-month high, while gasoline inventories are expected to decline by 0.25 million barrels.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery retreated 0.65% to trade at USD123.38 a barrel, with the spread between the Brent and crude contracts standing at USD15.29.
Brent futures have rallied nearly 11% since the beginning of February, as geopolitical and production issues in Iran, the North Sea, South Sudan, Syria and Yemen tightened supplies.
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