Oil Little Changed on Winter Demand, Weak Dollar
By Florence Tan
SINGAPORE — Brent crude was little changed on Tuesday, staying above $109 a barrel, as robust demand for heating purposes from North America and a weak dollar offset concern over disappointing US data.
Brent crude was trading at $109.08 a barrel by 3.02am GMT, holding just below Monday’s close of $109.18 — the highest settlement since February 7.
US crude was up 42c at $100.72 a barrel. There was no settlement on Monday as US markets were shut for the President’s Day holiday.
“There’s obviously general support from the cold weather and support is also coming from the US dollar weakness,” CMC Markets chief analyst Ric Spooner said in Sydney.
“On the other hand, the general run of disappointing economic statistics from the US, including retail sales and nonfarm payrolls, was probably a consequence of cold weather.
“The market will be more comfortable when we get through the cold weather and see those figures return to trend levels.”
A slew of disappointing US data pinned the dollar near six-week lows against a basket of currencies on Tuesday, while investors will scour the minutes of Federal Reserve’s last policy meeting on Wednesday and China’s manufacturing data on Thursday for clues on the health of the global economy.
A weak dollar supports commodities priced in the greenback by making them cheaper for holders of other currencies.
Low oil inventories
Oil prices also drew support from a report that showed developed countries started the year with the lowest oil inventories since 2008.
Oil inventories in the developed world plummeted by 1.5-million barrels a day in the last three months of 2013, the steepest quarterly decline since 1999, the International Energy Agency (IEA) said in its monthly report last week.
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