Oil near $98 a barrel after higher US retail sales
- Article by: PABLO GORONDI
- Associated Press
- December 12, 2013 - 9:15 AM
Oil prices climbed to near $98 a barrel on Thursday, as a rise in U.S. retail sales pointed to higher spending during the holiday season and could provide a boost to the economy.
By mid-afternoon in Europe, benchmark U.S. oil for January delivery was up 43 cents to $97.87 in electronic trading on the New York Mercantile Exchange.
On Wednesday, the contract fell $1.07 to close at $97.44 after the U.S. Energy Department said gasoline and distillate supplies increase more than three times what analysts were expecting. That raised the possibility that refiners would slow production and purchases of oil in the coming weeks.
But the market was buoyed somewhat on Thursday after the Commerce Department said retail sales rose 0.7 percent in November. It was the biggest gain in five months and suggested consumer spending would increase during the winter season.
At the same time, traders seemed to shrug off a rise in applications for U.S. unemployment benefits, as the data may have been distorted by the recent holidays.
The Labor Department said that the number of people applying rose by 68,000 last week, to a seasonally adjusted 368,000. It was the largest rise in first-time applications in more than a year, but it was likely the result of the difficulty adjusting for delays after Thanksgiving.
Markets will be looking for fresh direction from next week's policy meeting of the U.S. Federal Reserve. There are increasing expectations that the Fed will start to cut back its monetary stimulus which has helped push investors to commodities like oil in search of profits outpacing low bonds yields.
In other markets, Brent crude, a benchmark for international oils, was down 74 cents at $108.96 a barrel on the ICE exchange in London.
Among other energy futures trading on the Nymex:
— Wholesale gasoline was flat at $2.6611 a gallon.
— Heating oil lost 1.31 cents to $3.0081 a gallon
— Natural gas rose 5.9 cents to $4.396 per 1,000 cubic feet.
© 2014 Star Tribune