Forexpros – Crude oil futures traded higher during the U.S. afternoon sessionTuesday, adding to strong gains after better-than-expected U.S. data lifted hopes for a global economic recovery.
On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD93.03 a barrel during U.S. afternoon trade, rallying 0.38%.
Earlier in the day, prices rose by as much as 1.25% to trade at a session high of USD93.92 a barrel. Prices hit a three-month high of USD94.69 a barrel on August 8.
Sparking the rally, 0il prices extended gains after official data showed that retail sales in the U.S. posted the largest monthly gain since February last month, easing concerns over the country’s economic outlook.
The U.S. Commerce Department said retail sales rose by a seasonally adjusted 0.8% in July, easily surpassing expectations for a 0.3% increase. It was the first monthly gain in four months.
Core retail sales, which exclude automobiles, rose 0.8%, more than the expected 0.4% increase and following a 0.8% decline in June.
A separate report showed that U.S. producer prices rose at the fastest pace in five months in July, climbing by a more-than-expected 0.3%, following a 0.1% increase the previous month.
Oil traders were now looking ahead to 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 fell by 1.6 million barrels.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Meanwhile, in the euro zone, official data showed that the region’s gross domestic product contracted by 0.2% in the three months to June, in line with expectations.
Reports also showed Germany’s economy expanded by 0.3% in the second quarter, slightly better than expectations for 0.2% growth, while France’s economy stagnated in the second quarter, beating expectations for a 0.1% contraction.
The 17 countries using the euro accounted for about 12% of world demand last year, according to British Petroleum.
Rising tensions between Israel and Iran further supported gains in oil prices. 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.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery rose 0.2% to trade at USD111.95 a barrel, with the spread between the Brent and crude contracts standing at USD18.40.
London-traded Brent prices touched USD113.52 on Friday, the highest since May 10.
Brent prices have been well-supported in recent weeks, rallying nearly 20% from the lows touched in June, amid growing concerns over tightening supplies from the North Sea region and following the launch of Western-led sanctions targeting Iranian oil exports on July 1.
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