Brent crude holds steady above $113 on positive U.S. data

SINGAPORE Tue Jan 29, 2013 8:51am IST

A customer uses a petrol nozzle to fill up his tank in a gas station in Nice August 27, 2012. REUTERS/Eric Gaillard/Files

A customer uses a petrol nozzle to fill up his tank in a gas station in Nice August 27, 2012.

Credit: Reuters/Eric Gaillard/Files

Related Topics

SINGAPORE (Reuters) - Brent crude held steady above $113 on Tuesday on hopes that economic growth might be picking up in the world's largest oil consumer after a gauge of planned U.S. business spending rose in December, adding to recent positive global economic data.

But traders remained cautious ahead of a U.S. monetary policy meeting and economic reports out of the United States and China this week.

Brent crude edged up 8 cents to $113.56 a barrel by 0238 GMT, while U.S. crude rose 19 cents to $96.63.

Markets were waiting for trading cues from the Federal Open Market Committee meeting on Wednesday and payroll data due on Friday, said Tetsu Emori, a commodities fund manager at Astmax Investments in Tokyo.

"I don't think there's much downside risk," he said. "I think economic data out of the United States has improved, so i don't think there are any negative factors in the market."

Risk appetite has been improving after a raft of positive global economic data.

The Commerce Department said on Monday that orders for non-defence capital goods excluding aircraft, a closely watched proxy for investment plans, edged up 0.2 percent last month.

Many economists expected businesses to invest more timidly late last year because of uncertainty over government spending cuts and tax increases that had been due to kick in this month. Congress ultimately struck a last-minute deal to avoid or delay most of the austerity measures.

Despite the uncertainty, Monday's data pointed to growing economic momentum as companies sensed improved consumer demand.

The Federal Reserve, whose policy-setting panel concludes a two-day meeting on Wednesday, has said it expects to keep short-term interest rates exceptionally low to help support the economy.

U.S. nonfarm payroll figures due on Friday are likely to show the jobless rate unchanged in January and that the U.S. economy created 155,000 jobs, economists polled by Reuters say.

MIDDLE EAST TENSION

Persisting tension in the Middle East and Africa also supported oil. Iran said on Monday it had launched a live monkey into space, seeking to show off missile systems that have alarmed the West because the technology could potentially be used to deliver a nuclear warhead.

Suspected Islamist militants attacked an oil pipeline in northern Algeria, killing two guards and wounding seven other people, a security source told Reuters.

In Egypt, thousands of protesters ignored a curfew to take to the streets in cities along the Suez canal, defying a state of emergency imposed by Islamist President Mohamed Mursi to end days of violence that has killed at least 51 people.

Overall, the world oil market should remain well supplied in 2013 and OPEC does not need to trim back its oil output, Secretary-General Abdullah al-Badri said.

GASOLINE PRICES HIGHER

Gasoline hit a near three-month high following news that an oil refinery in the U.S. northeast region will close, which could boost oil demand.

The loss of the plant, the latest in the region to fall victim to poor profits, tightened the supply outlook for the Northeast, which is likely to have to rely more on imports and supplies from the Gulf Coast, according to analysts.

"As US refiners typically build up stocks over spring to meet peak summer demand, the closure of this refinery is supporting ideas that the supply of gasoline in the summer could tighten," ANZ analysts said in a note on Tuesday.

(Editing by Clarence Fernandez)

FILED UNDER:
  • Most Popular
  • Most Shared

Market Eye

REUTERS SHOWCASE

Intel's Valuation

Intel's Valuation

Intel could rise 30 percent over next two years - Barron's.  Full Article 

Plunging Oil Prices

Plunging Oil Prices

Oil price seen falling to $60 if OPEC does not cut output  Full Article 

China Economy

China Economy

Exclusive - China ready to cut rates again on fears of deflation - sources  Full Article 

Climate Change

Climate Change

Some climate change impacts unavoidable - World Bank  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage