Crude Oil Ends Above $103 A Barrel

(RTTNews) - U.S. crude oil ended higher for a second straight session Wednesday, on demand growth prospects for heating oil with the severe cold weather forecast to continue for an extended period of time.

The dollar trended higher after the release of the Federal Reserve's January meeting minutes, recovering from losses following some disappointing housing starts and building permits data from the U.S.

On the economic front, the pace of new home building projects in the U.S. fell sharply in January, a new government report showed on Wednesday. Severe winter weather may have impacted the statistics. Building permits, a measure of future building activity, also dropped during the month, though the fall was far less steep.

Meanwhile, wholesale inflation in the U.S. picked up slightly in January, new government statistics showed Wednesday, in line with expectations and well within a range that indicates that inflation pressures remain under control. The report included a new computing structure, with attempts to paint a broader picture of how prices are moving in the economy.

Light Sweet Crude Oil futures for March delivery, the most actively traded contract, gained $0.88 or 0.9 percent to close at $103.31 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for March delivery scaled a high of $103.37 a barrel intraday and a low of $102.40.

Natural gas futures soared Wednesday, with demand for heating oil surging with the cold weather expected to further continue in the U.S. Natural gas for March delivery settled at $6.149 mBtu, up 11 percent from $5.55 mBtu on Tuesday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.19 on Wednesday, up from its previous close of 80.00 late Tuesday in North American trade. The dollar scaled a high of 80.24 intraday and a low of 79.93.

The euro traded lower against the dollar at $1.3737 on Wednesday, as compared to its previous close of $1.3759 late Tuesday in North America. The euro scaled a high of $1.3773 intraday and a low of $1.3726.

In economic news from the U.S., the pace of new home building projects fell sharply in January, according to government figures released on Wednesday. Severe winter weather may have impacted the statistics. The Commerce Department said housing starts dropped 16 percent to an annual rate of 880,000. This included a 15.9 percent drop in new construction on single-family homes. Economists expected a drop, but at about 950,000 homes. The housing starts figure is 2 percent below the pace seen in January of 2013. The stats for December was revised upward to 1.048 million homes, compared to the rate of 999,000 originally reported.

Building permits, a measure of future building activity, also dropped during January, though the fall was far less steep. The figure fell 5.4 percent in January to a pace of 937,000.

Meanwhile, a Labor Department report showed wholesale inflation in the U.S. picked up slightly in January, advancing 0.2 percent in January compared to the previous month. This was a slightly faster pace than was seen in December, when the figure showed a 0.1 percent increase. Economists had expected the figure to rise by 0.2 percent.

Producer prices in the U.S. advanced 0.2 percent in January compared to the previous month. Compared with last year, producer prices were up 1.2 percent, a slight pick up from the previous month's pace of 1.1 percent.

From Europe, unemployment rate in U.K. rose unexpectedly in December, arresting the continuous decline seen since early last year that took the rate close to the Bank of England's 7 percent threshold. The ILO unemployment rate climbed to 7.2 percent in the December quarter from 7.1 percent in the three months to November. The increase was the first since February last year, when it was 7.9 percent. Economists expected the rate to remain unchanged at 7.1 percent in the fourth quarter.

With markets were closed on Monday on account of the Presidents Day holiday, the supply data from the American Petroleum Institute will be available late Wednesday and the official Energy Information Administration report on Thursday.