Crude Oil Futures End Higher Amid Dollar Weakness, Pending Economic Data

Strategic Insights -

Crude oil futures rose marginally higher on Thursday as the dollar slipped against other currencies, creating a favorable environment for oil priced in US dollars to rise. However, uncertainty surrounding the Federal Reserve's plan to stimulate the economy and upcoming economic data kept traders cautious, resulting in a limited price move. The Federal Open Market Committee is expected to decide next week how to act to stimulate the economy, potentially affecting commodities markets. Analysts are waiting for Friday's release of US gross domestic product data and the Federal Reserve's quantitative easing plan, which could influence oil prices.

Key Takeaways:

  • Crude oil futures settled up 24 cents, or 0.3%, at $82.18 a barrel on the New York Mercantile Exchange.
  • Brent crude on the ICE futures exchange added 23 cents, or 0.3%, at $83.46 a barrel.
  • Traders were unwilling to open new positions ahead of Friday's release of quarterly US GDP data, resulting in the lowest-volume day for Nymex oil-futures contracts all year.
  • The Federal Reserve's quantitative easing plan, which involves buying bonds and increasing the money supply, is expected to weaken the dollar and support crude oil prices.
  • The ICE Dollar Index fell to 77.293, making oil cheaper to buy using other currencies.
  • Analysts are focusing on the dollar's reaction to the Federal Reserve's quantitative easing and the release of US GDP data on Friday.

Statistics:

  • Crude oil futures settlement price: $82.18 a barrel on the New York Mercantile Exchange.
  • Brent crude settlement price: $83.46 a barrel on the ICE futures exchange.
  • Dollar weakness: ICE Dollar Index fell to 77.293 from 78.149 on Wednesday.
  • Upcoming economic data: Release of US GDP data on Friday, excepted to show a 2.1% increase in third-quarter GDP.
  • Federal Reserve's quantitative easing plan: Expected to weaken the dollar and support crude oil prices.

Sources:

  • Dow Jones Commodities News via Comtex
  • Dan Strumpf, Dow Jones Newswires; 212-416-2818; dan.strumpf@dowjones.com
  • Dow Jones & Company, Inc.