Whereas earlier yesterday, crude oil futures ended slightly lower in thin trade, crude oil futures were trading near a two-week highs during early European trading hours on Friday. In Thursday’s trading, a major reason behind the decline was that expectations of more supply from the Middle East and North Africa were higher.
On the other hand, as markets awaited the release of U.S. data later in the day, strong manufacturing activity in the Philadelphia-region continued to support the oil prices and on the New York Mercantile Exchange, light sweet crude futures for delivery in March was trading higher. It was at USD 94.35 a barrel during European morning trade.
Similarly, the February contract settled down 0.26% on Thursday and finally closed at USD94.10 a barrel. According to market observers with keen eye on oil market, oil futures were likely to find support at USD92.63 a barrel. According to them resistance at USD95.73 a barrel is quite expected.
Oil prices which have been falling the whole 2013, according to market observers may go up as these are being strengthened by the Federal Reserve Bank of Philadelphia’s statement that its manufacturing index improved to 9.4 this month from December’s reading of 6.4. Nevertheless, market observers believe that the index may rise to a reading of 8.6 in January.
Earlier, the data about employment came from the U.S. government and showed that the number of people who filed for unemployment assistance in the U.S. last week fell to a six-week low. According to the Department of Labor the number of individuals filing for initial jobless benefits in the week ending January 11 declined by 2,000 which is quite welcoming.
Nevertheless, a major addition in oil supply will be from TransCanada’s Oklahoma-to-Texas Gulf Coast crude oil pipeline which is set to begin commercial service next week at a little over 300,000 barrels per day. Earlier on Thursday, U.S. crude oil futures traded marginally lower over the day and closed down for the second time this week.
On the other hand, Brent is not facing any issues related to stability as it is steady between an expected increase in supply from Libya and Iran and OPEC cuts. Reportedly, Brent crude for February delivery expired down 4 cents at $107.09 a barrel. However, according to market observers West Texas Intermediate’s recent strength against Brent is likely temporary.
To contact the reporter of this story: Jonathan Millet at firstname.lastname@example.org