Crude Oil Prices Rise Amid Economic Concerns and Housing Market Data

Strategic Insights -

Crude oil prices climbed on Tuesday, coinciding with higher equity markets, despite ongoing concerns about a rescue package for Greece's debt and the strength of the economic recovery. The National Association of Realtors reported a 0.6% decline in existing home sales in February, less than expected, which contributed to a strengthening in the dollar. However, oil prices failed to maintain gains above $82 a barrel due to lingering concerns over Greece's sovereign debt woes and skepticism about the economic rebound.

Key Takeaways:

  • Crude oil prices rose 31 cents, or 0.4%, to settle at $81.91 a barrel on the New York Mercantile Exchange for May delivery.
  • Brent crude on the ICE futures exchange closed 14 cents, or 0.2%, higher at $80.68 a barrel.
  • U.S. existing home sales fell 0.6% to a 5.02 million annual rate in February, less than analyst expectations of a 2% decrease to a rate of 4.95 million.
  • The housing data did not generate sufficient momentum for oil to maintain gains above $82 a barrel, according to Mike Fitzpatrick, vice president for energy with MF Global in New York.
  • Oil prices were also influenced by the dollar's strengthening against the euro, which weighed on prices due to uncertainty about a rescue package for Greece.
  • Analysts surveyed by Dow Jones anticipate a 1.3-million-barrel drop in gasoline inventories and a 600,000-barrel decline in distillate stocks, which includes diesel and heating oil.
  • MasterCard reported that U.S. gasoline demand rose 1.4% to 9.66 million barrels a day in the week ended March 19, the highest weekly level since June 26, 2009.

Statistics:

  • Crude oil prices rose 31 cents, or 0.4%, to settle at $81.91 a barrel on the New York Mercantile Exchange for May delivery.
  • Brent crude on the ICE futures exchange closed 14 cents, or 0.2%, higher at $80.68 a barrel.
  • U.S. existing home sales fell 0.6% to a 5.02 million annual rate in February.
  • Analysts surveyed by Dow Jones anticipate a 1.3-million-barrel drop in gasoline inventories and a 600,000-barrel decline in distillate stocks.
  • MasterCard reported that U.S. gasoline demand rose 1.4% to 9.66 million barrels a day in the week ended March 19.

Sources:

  • Dow Jones Commodities News via Comtex, "Crude oil prices rise Tuesday, in line with higher equity markets," March 23, 2010.
  • The National Association of Realtors, "Existing Home Sales for February 2010," February 2010.
  • MasterCard, "U.S. Gasoline Demand Increases 1.4%," March 23, 2010.
  • Dow Jones, "U.S. Oil Inventory Data to Offer Further Direction to Prices," March 23, 2010.
  • Dow Jones Newswires, "Crude Oil Prices Rise Amid Economic Concerns," March 23, 2010.