U.S. crude oil snapped a two-day loss to end higher Monday, as the dollar trended lower against a basket of major currencies and on hopes of increasing demand with China’s oil import rising in February.
Nonetheless, the gains were capped as investors await the supply data later this week which in recent weeks have shown sharp increases.
China’s trade surplus rose to a record high in February as exports surged due to the effect of the timing of the Lunar New Year, data from the customs office showed Sunday. Although China’s import plunged in February, crude oil imports rose 11 percent to 25.55 million tons from a year ago.
Meanwhile, Goldman Sachs has predicted oil futures to stay low for a while, but said its earlier forecast of $40 oil may be a bit too low.
The Secretary General of the Organization of the Petroleum Exporting Countries Abdalla Salem el-Badri, on Sunday said the U.S. shale industry has been hurt by lower oil prices. He opined that a global cut on investment could see less of oil in the market and that could boost oil prices.
Oil prices withstood the massive increases in U.S. crude oil inventories in recent weeks, but with little space left at storage facilities, the next move for crude prices may be back towards 6-year lows near $44 seen earlier in 2015.
Light Sweet Crude Oil futures for April delivery, the most actively traded contract, gained $0.39 or 0.8 percent to settle at $50.00 a barrel on the New York Mercantile Exchange Monday.
Crude prices for April delivery scaled a high of $52.44 a barrel intraday and a low of $51.06.
On Friday, crude oil fell $1.15 or 2.3 percent to settle at $49.61 a barrel, as the dollar strengthened on some upbeat economic data from the U.S. that showed unemployment rate to have declined more than expected.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.58 on Monday, down from its previous close of 97.81 on Thursday in late North American trade. The dollar scaled a high of 97.78 intraday and a low of 97.29. The dollar scaled its highest intraday in the last one year.
The euro trended higher against the dollar at $1.0863 on Monday, as compared to its previous close of $1.0842 on Friday in late North American trade. The euro scaled a high of $1.0908 intraday and a low of $1.0837, the lowest in the last one year.
On the economic front, China’s trade surplus rose to a record high in February as exports surged due to the effect of the timing of the Lunar New Year, figures from the customs office showed Sunday. The trade surplus came in at $60.6 billion in February, much more than the $6 billion expected by economists.
Japan’s gross domestic product expanded just 1.5 percent on year in the fourth quarter of 2014, the Cabinet Office said in Monday’s revised reading. That was well shy of forecasts for 2.2 percent, which would have been unchanged from the February 15 preliminary reading.
Eurozone investor confidence reached its highest level since August 2007, survey data from the think tank Sentix showed Monday. The investor confidence index for March rose to 18.6 from 12.4 in February. This was the highest score since August 2007.
Germany’s exports declined at the fastest pace since August although a weaker euro is likely to boost shipments in months ahead. Exports dropped by a worse-than-expected 2.1 percent month-on-month in January, reversing December’s revised 2.8 percent increase, data from Destatis revealed Monday. It was severe than a 1.5 percent fall forecast by economists.
Meanwhile, the Bank of France lowered its economic growth forecast for the first quarter even as business confidence in the manufacturing sector deteriorated, a survey report from the bank showed Monday. The central bank cut its first-quarter growth forecast for the French economy to 0.3 percent from 0.4 percent seen earlier. Preliminary data showed that the French economy grew 0.1 percent in the final three months of 2014.
The Organization for Economic Cooperation and Development said the leading index signaled stable growth momentum in the region and positive development in the euro area. The composite leading indicator increased to 100.4 in January from 100.3 in the previous month, the OECD said Monday.
The material has been provided by InstaForex Company – www.instaforex.com