Oil prices edge up before U.S. data

By Agence France-Presse
Tuesday, March 27, 2012 7:39 EDT
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World oil prices crept higher on Tuesday  (AFP)
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World oil prices crept higher on Tuesday, as dealers awaited keyeconomic data in top crude consumer the United States, and eyed the weak dollar and new supply tensions in Sudan.

In late morning deals in London, Brent North Sea crude for delivery in May added just two cents to $125.67 a barrel.

New York’s main contract, West Texas Intermediate (WTI) crude for May, won 29 cents to $107.32 per barrel.

“The oil market is on a consolidation mode, as investors remain cautious ahead of the release of the US data that could set the tone for today’s trading session,” Sucden commodities analyst Myrto Sokou told AFP.

“WTI crude oil is trading within the narrow range of $107-$108 per barrel,” she added.

Traders will focus this week on a raft of crucial economic figures across the Atlantic, with consumer confidence due on Tuesday, durable goods orders on Wednesday and the final estimate of fourth-quarter economic growth on Thursday.

The market will also digest the Chicago-area purchasing managers’ index and figures on personal income on Friday.

Crude futures had risen on Monday after US Federal Reserve chairman Ben Bernanke indicated that the central bank would likely keep its easy money policy for the time being, citing continued weakness in the job market.

The news pushed the euro late Monday to $1.3368, reaching its highest level since February 29.

The weaker greenback makes dollar-priced crude cheaper for buyers using stronger currencies. This tends to stimulate oil demand and prices.

Investors’ worries have been stoked by the recent spate of glum data out of China, including contracting manufacturing activity and a huge trade deficit amid falling demand from debt-wracked Europe — the biggest buyer of Chinese exports.

Aside from economic worries, traders are also mindful of fresh supply-side worries in Sudan.

Sudanese warplanes launched a second day of bombardment of oil-rich areas of South Sudan Tuesday, after bloody clashes between ground troops of the rival states, a Southern official said.

Sudanese President Omar al-Bashir suspended an April summit with his Southern counterpart Salva Kiir following the flare-up, prompting UN chief Ban Ki-moon to appeal for calm between the former civil war foes.

Khartoum said the attacks were in response to raids by Southern troops on Monday on Sudanese territory.

On Monday, Kiir said his troops had driven northern forces back across the undemarcated border and seized Khartoum’s Heglig oil field, parts of which are claimed by both sides.

Border tensions have mounted since South Sudan split from Sudan in July after decades of war to become the world’s newest nation, with each side accusing the other of backing proxy rebel forces against it.

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
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