Crude Oil Ends Above $100 On Upbeat Data, Lower Gasoline Stocks

(RTTNews) - U.S. crude oil ended higher for the first time in over two weeks on Wednesday, after some upbeat durable goods orders data from the U.S. raising expectations of increased pace in economic growth, leading to improved demand prospects for oil. With the tough stand taken by the West on Russia's annexation of Ukraine's Crimea region, investors continued to worry of some serious disruption in supplies from the region.

Investors largely ignored the much more-than-expected jump in the official crude oil stockpiles in the U.S. last week, although gasoline stocks plummeted three times more-than-expected.

Earlier today, data from the Energy Information Administration revealed U.S. crude oil inventories to have jumped by 6.6 million barrels in the week ended March 21, while analysts expected an increase of 2.6 million barrels.

Nevertheless, gasoline stocks plunged 5.1 million barrels last week, with analysts anticipating a decline of 1.8 million barrels. Inventories of distillate, including heating fuel, unexpectedly rose by 1.6 million barrels, even as analysts predicted a decline of 1.0 million barrels.

The American Petroleum Institute also said its data for last week showed crude stockpiles to have increased by 6.3 million barrels.

The United States and its allies, after casting Russia out of the Group of 8, are considering tough sanctions on Russia in response to its annexation of Ukraine's Crimea region.

Light Sweet Crude Oil futures for May delivery, the most actively traded contract, jumped $1.07 or 1.1 percent to close at $100.26 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for May delivery scaled a high of $100.39 a barrel intraday and a low of $99.10.

Yesterday, crude oil ended lower with investors worried over developments in Ukraine and the possible disruption in oil supplies from Russia.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.02 on Tuesday, up from its previous close of 79.94 late Tuesday in North American trade. The dollar scaled a high of 80.14 intraday and a low of 79.94.

The euro traded lower against the dollar at $1.3787 on Wednesday, as compared to its previous close of $1.3826 late Tuesday in North America. The euro scaled a high of $1.3827 intraday and a low of $1.3780.

In economic news, a U.S. Commerce Department report showed durable goods orders rose more than expected in February, showing a 2.2 percent rise, following a revised 1.3 percent decrease a month earlier. Economists expected orders to increase by about 1.0 percent. However, when excluding the jump in orders for transportation equipment, durable goods orders inched up by just 0.2 percent in February after rising by a revised 0.9 percent in January. Ex-transportation orders had been expected to edge up by 0.3 percent compared to the 1.1 percent increase originally reported for January.

Elsewhere, the euro area leading index rose marginally in February indicating that the rebound effects from the recession is fading and the pace of growth may not accelerate further, the Conference Board said Wednesday. The leading economic index that signals turning points in the business cycle, gained 0.1 percent from January, when it rose 1.4 percent.

The World Bank on Wednesday warned that the Russian economy could shrink significantly this year and the next if the crisis caused by Russia's annexation of the Ukrainian autonomous region of Crimea worsens. Under the Bank's low-risk scenario, growth is projected to slow to 1.1 percent in 2014 and slightly picking up to 1.3 percent in 2015.

The high-risk scenario assumes a more severe shock to economic and investment activities if the geopolitical situation worsens and projects a contraction in output of 1.8 percent for 2014. Under the high-risk scenario, the economy is seen rebounding with 2.1 percent growth in 2015, if there is an 'orderly resolution' of the Crimean crisis.

Meanwhile, comments made by top officials of the European Central Bank suggest it might consider bold steps to fight the significantly low inflation, which might see the central bank going in for negative interest rates and asset purchases.

The comments by top policy makers from different parts of the euro zone suggest the ECB, faced with a weak economy and strong currency, is prepared to shed some of its cautious approach and take more-aggressive action, as central banks in the U.S., the U.K. and Japan have done for years.