Forexpros – Crude oil futures trimmed gains on Wednesday, easing off a four-day high following the release of a flurry of downbeat U.S. economic data and as concerns over the euro zone’s sovereign debt crisis continued to weigh on sentiment.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD101.03 a barrel during early U.S. morning trade, easing up 0.2%.
It earlier rose by as much as 1.1% to trade at USD102.23 a barrel, the highest since January 12.
Crude prices came off their highs after the Bureau of Labor Statistics said that PPI declined by a seasonally adjusted 0.1% in December, confounding expectations for a 0.1% gain, bringing the annualized rate to 4.8%.
But core PPI, which excludes the volatile food and energy categories, rose 0.3% in December, taking the annualized rate of increase to 3.0%, the fastest increase since June 2009.
A separate report showed that industrial production in the U.S. rose less-than-expected in December, while the previous month’s figure was downwardly revised to show a bigger decline.
Meanwhile, initial optimism over a report that the International Monetary Fund planned to boost its lending capacity to USD1 trillion faded. Sources said the IMF needs to raise up to USD600 billion in new funds to lend to countries struggling with the fallout from the euro zone’s debt crisis. Initial reports called for the IMF seeking USD1 trillion.
Greece’s government was due to resume talks with its bond holders to discuss a voluntary write-down on Greece’s sovereign debt, after talks broke down on Friday, amid disagreements over how much money investors will lose by swapping their bonds.
Crude prices continue to draw support from concerns over potential disruptions to Iranian oil exports. European Union foreign ministers are scheduled to meet January 23 to decide on proposed sanctions on Iran’s oil imports.
Oil traders 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 Thursday’s government report could show crude stockpiles rose by 2.9 million barrels last week, the third consecutive weekly gain.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery shed 0.31% to trade at USD111.19 a barrel, with the spread between the Brent and crude contracts standing at USD10.16 a barrel.
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