Investing.com - Crude oil futures held on to gains but came off the highest levels of the session during U.S. morning trade on Wednesday, after a U.S. government report showed oil supplies declined last week.
Renewed optimism in the U.S. economic recovery provided further support to the market as investors remained cautious ahead of Thursday’s key European Union summit.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD80.24 a barrel during U.S. morning trade, rallying 1.1%.
It earlier rose by as much as 1.8% to trade at a session high of USD80.84 a barrel, which was the highest since June 21. Prices touched and eight-month low of USD77.56 a barrel on June 22.
The August crude contract traded at USD80.63 prior to the release of the Energy Information Administration data.
The U.S. EIA said in its weekly report that U.S. crude oil inventories dipped by 0.1 million barrels in the week ended June 22, compared to expectations for a 0.4 million barrel decline. U.S. crude supplies rose by 2.86 million barrels in the preceding week.
Total U.S. crude oil inventories stood at 387.2 million barrels as of last week, just below the highest level since July 1990.
Total motor gasoline inventories increased by 2.1 million barrels, above expectations for a gain of 0.8 million barrels, after rising by 0.95 million barrels in the preceding week.
Meanwhile, a report by the National Association of Realtors showed that pending home sales jumped 5.9% in May, blowing past expectations for a 1% increase, to match a two-year high hit in March.
Another report showed that U.S. durable goods orders rose by a seasonally adjusted 1.1% in May, beating expectations for a 0.4% increase, indicating that the manufacturing sector is stabilizing following a 0.2% drop in May.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Despite the gain, market sentiment remained fragile ahead of an EU summit due to begin on Thursday, amid worries the talks will not result in any effective steps to strengthen fiscal integration and allow the euro zone’s rescue funds to buy government debt.
Hopes that European leaders would make headway on dealing with the debt crisis in the region faded after German Chancellor Angel Merkel reiterated her opposition to the idea of joint euro zone bonds earlier in the day.
Elsewhere, Italy saw borrowing costs climb to the highest level since December at an auction of six-month government bonds, as investor sentiment towards Italy continued to deteriorate.
Italy’s Treasury sold the full targeted amount of EUR9 billion of six-month government bonds at an average yield of 2.95%, up from 2.10% at a similar auction last month.
Meanwhile, the yield on Spanish 10-year government bonds was at 6.87%, nearing the critical 7% threshold, which is widely viewed as unsustainable in the long term.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery rose 0.4% to trade at 93.39 a barrel, with the spread between the Brent and crude contracts standing at USD13.15.
Prices fell to as low as USD88.49 a barrel on June 22, the lowest since December 20, 2010.
London-traded Brent prices are down nearly 28% since hitting an intraday high of USD128.38 on March 1, as an escalating debt crisis in the euro zone and worries over a deeper-than-expected slowdown in Chinese economic activity dragged prices lower.
Renewed optimism in the U.S. economic recovery provided further support to the market as investors remained cautious ahead of Thursday’s key European Union summit.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD80.24 a barrel during U.S. morning trade, rallying 1.1%.
It earlier rose by as much as 1.8% to trade at a session high of USD80.84 a barrel, which was the highest since June 21. Prices touched and eight-month low of USD77.56 a barrel on June 22.
The August crude contract traded at USD80.63 prior to the release of the Energy Information Administration data.
The U.S. EIA said in its weekly report that U.S. crude oil inventories dipped by 0.1 million barrels in the week ended June 22, compared to expectations for a 0.4 million barrel decline. U.S. crude supplies rose by 2.86 million barrels in the preceding week.
Total U.S. crude oil inventories stood at 387.2 million barrels as of last week, just below the highest level since July 1990.
Total motor gasoline inventories increased by 2.1 million barrels, above expectations for a gain of 0.8 million barrels, after rising by 0.95 million barrels in the preceding week.
Meanwhile, a report by the National Association of Realtors showed that pending home sales jumped 5.9% in May, blowing past expectations for a 1% increase, to match a two-year high hit in March.
Another report showed that U.S. durable goods orders rose by a seasonally adjusted 1.1% in May, beating expectations for a 0.4% increase, indicating that the manufacturing sector is stabilizing following a 0.2% drop in May.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Despite the gain, market sentiment remained fragile ahead of an EU summit due to begin on Thursday, amid worries the talks will not result in any effective steps to strengthen fiscal integration and allow the euro zone’s rescue funds to buy government debt.
Hopes that European leaders would make headway on dealing with the debt crisis in the region faded after German Chancellor Angel Merkel reiterated her opposition to the idea of joint euro zone bonds earlier in the day.
Elsewhere, Italy saw borrowing costs climb to the highest level since December at an auction of six-month government bonds, as investor sentiment towards Italy continued to deteriorate.
Italy’s Treasury sold the full targeted amount of EUR9 billion of six-month government bonds at an average yield of 2.95%, up from 2.10% at a similar auction last month.
Meanwhile, the yield on Spanish 10-year government bonds was at 6.87%, nearing the critical 7% threshold, which is widely viewed as unsustainable in the long term.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery rose 0.4% to trade at 93.39 a barrel, with the spread between the Brent and crude contracts standing at USD13.15.
Prices fell to as low as USD88.49 a barrel on June 22, the lowest since December 20, 2010.
London-traded Brent prices are down nearly 28% since hitting an intraday high of USD128.38 on March 1, as an escalating debt crisis in the euro zone and worries over a deeper-than-expected slowdown in Chinese economic activity dragged prices lower.