Crude Oil Settles Higher Ahead Of Supply Data

(RTTNews) - U.S. crude oil ended higher Tuesday, ahead of the official weekly oil report from the U.S. Energy Information Administration, which is expected to show a decline in crude stockpiles. Nevertheless, the uptick in oil prices were capped over concerns of oversupply after a deal with Iran on its nuclear program and Libya's expected return to normal production and export of crude.

Some upbeat economic data also spurred oil prices with retail sales in the U.S. rising more than expected in December, with a notable downward revision to the sales growth numbers for November. Meanwhile, prices of goods imported into the U.S. remained unchanged, while business inventories also rose more than expected in November.

From the eurozone, Industrial production came in better-than-expected in November, rising at the fastest pace in more than three years, easing concerns of sluggish recovery while boosting the outlook for the 18-nation economy.

Light Sweet Crude Oil futures for February delivery, the most actively traded contract, gained $0.79 or 0.9 percent to close at $92.59 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for February delivery scaled a high of $92.88 a barrel intraday and a low of $91.50.

Oil prices ended sharply lower yesterday, mostly on oversupply concerns after Iran reached a deal on its nuclear program with major Western powers last week. The expected return of Libyan oil production and export to normal also pushed prices down.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.63 on Tuesday, up from its previous close of 80.57 late Monday in North American trade. The dollar scaled a high of 80.70 intraday and a low of 80.44.

The euro traded higher against the dollar at $1.3675 on Tuesday, as compared to its previous close of $1.3672 late Monday in North America. The euro scaled a high of $1.3700 intraday and a low of $1.3650.

In economic news, retail sales in the U.S. edged up 0.2 percent in December compared to economists' estimates for a 0.1 percent increase. Sales by motor vehicle and parts dealers tumbled 1.8 percent in December after a jump in November. Excluding auto sales, retail sales rose 0.7 percent in December compared to a downwardly revised 0.1 percent uptick in November. Ex-auto sales was expected to rise 0.4 percent. Sales by gas stations surged 1.6 percent in December after a slump in November, while sales of building materials dropped 0.4 percent after rising 0.4 percent a month ago.

The less volatile core retail sales, which exclude auto, gasoline, and building materials, increased 0.7 percent in December. At the same time, the Commerce Department said the retail sales growth in November was downwardly revised to 0.4 percent from the 0.7 percent originally reported.

Business inventories in the U.S. rose more than expected in the month of November, a report released Commerce Department report showed Tuesday. Business inventories increased 0.4 percent in November after rising 0.8 percent in October. Economists expected inventories to increase 0.3 percent. Retail inventories rose 0.8 percent in November after jumping 1.1 percent in October. Wholesale inventories rose 0.5 percent after surging 1.3 percent in the previous month.

Import prices in the U.S. unexpectedly came in unchanged in December, after reporting notable decreases in import prices in each of the two previous months, the Labor Department said. Import prices recorded no change in December following decreases of 0.9 percent in November and 0.6 percent in October. Economists expected import prices to increase by about 0.4 percent.

Eurozone Industrial production came in better-than-expected in November, rising at the fastest pace in more than three years. Data from Eurostat on Tuesday showed industrial output in the currency bloc to have advanced to a seasonally adjusted 1.8 percent in November from a month earlier, after falling for two months in a row. The increase was the biggest since May 2010, when production grew 2 percent. In October, production recorded a 0.8 percent fall, which was revised up from 1.1 percent. Economists expected 1.4 percent growth for November.

U.K. inflation in December came within the the Bank of England's 2 percent target for the first time in more than four years, an indication that prices were not bloated by robust economic recovery. Consumer prices rose 2 percent year-on-year, the slowest since November 2009, the Office for National Statistics said. The rate was forecast to remain stable at 2.1 percent. Nonetheless, on a monthly basis, consumer prices gained 0.4 percent, faster than the 0.1 percent rise posted in the prior month. However, the outcome was slightly slower than the expectations for 0.5 percent.