Crude Oil Ends Higher On Iraq, U.S. Export Ban Ease

(RTTNews) - U.S. crude oil snapped a two-day loss to end higher on Wednesday, amid fears the ongoing violence in Iraq could disrupt oil supplies from the region and on the Obama administration's decision to ease a ban on crude exports from the U.S. The uptick comes despite a weekly oil report from the U.S. Energy Information Administration that showed crude stockpiles to have increased more than expected last week.

Investors were also focused on developments in Iraq where militants have reportedly attacked an Iraqi airbase this morning.

Meanwhile, reports indicate the U.S. Commerce Department has permitted Pioneer Natural Resources Co. and Enterprise Products Partners to export a type of ultralight oil condensate in crude form, for refining at the buyers end. Although the exports could begin as early as August, analysts say the quantity could be small with no clarity as to how much the two companies could export under the rulings.

Earlier today, a report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have risen 1.7 million barrels in the week ended June 20, with analysts anticipating a drop of 2.0 million barrels. The EIA report showed U.S. crude oil inventories at 388.1 million barrels, end last week.

Gasoline stocks rose by 0.7 million barrels last week, while analysts anticipated an increase of 1.4 million barrels. Inventories of distillate, including heating fuel, rose 1.2 million barrels, with analysts looking for an increase of 1.0 million barrels.

A report from the American Petroleum Institute late Tuesday showed U.S. crude inventories to have risen by 4 million barrel in the week ended June 20.

Light Sweet Crude Oil futures for August delivery, the most actively traded contract, gained $0.47 or 0.4 percent to close at $106.50 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for August delivery scaled a high of $107.50 a barrel intraday and a low of $105.47.

On Monday, crude oil ended lower ahead of the official weekly oil inventory report amid concerns over the ongoing crisis in Iraq with U.S. Secretary of State John Kerry in Baghdad in an effort to bring together various factional leaders to tackle the ISIS menace.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.19 on Wednesday, down from its previous close of 80.32 late Tuesday in North American trade. The dollar scaled a high of 80.35 intraday and a low of 80.09.

The euro traded higher against the dollar at $1.3638 on Wednesday, as compared to its previous close of $1.3607 late Tuesday in North American trade. The euro scaled a high of $1.3651 intraday and a low of $1.3600.

In economic news, first quarter U.S. GDP decreased unexpected by 2.9 percent, compared to the previously estimated 1.0 percent drop. Economists expected the revised data to show a 1.8 percent decline.

A separate report from the Commerce Department showed durable goods orders to have unexpectedly declined by a seasonally adjusted 1 percent in May. Excluding transportation items, orders were down by a seasonally adjusted 0.1% in May. Economists expected a 0.4 percent month-over-month increase in durable goods orders. Excluding transportation, orders were expected to rise 0.3 percent.

Meanwhile, service sector activity in the U.S. grew at a faster rate, with Markit's reading for the sector coming in at 61.2 in June, up from 58.4 in the previous month.

German consumer confidence is set to improve to the highest since 2006 in July, as economic expectations and willingness to spend strengthened after the European Central Bank lowered its key rate early this month. The forward-looking consumer sentiment index rose to 8.9 in July from a revised 8.6 points in June, survey data from market research group GfK showed Wednesday. Economists had forecast the indicator to rise to 8.6 points from June's original estimate of 8.5.