Crude oil futures trim losses after upbeat U.S. economic data

Shutterstock photo - - Crude oil futures trimmed earlier losses during U.S. morning hours on Thursday, following the release of mostly upbeat U.S. economic data, but a lack of progress in negotiations for a deal to avoid a U.S. budget crisis before a January deadline continued to weigh.

On the New York Mercantile Exchange, light sweet crude futures for delivery in February traded at USD89.74 a barrel during U.S. morning trade, down 0.3% on the day.

New York-traded oil prices fell by as much as 0.8% earlier in the day to trade at a session low of USD89.27 a barrel.

Oil futures rallied 1.8% on Wednesday to hit USD90.32 a barrel, the strongest level since October 22, after a U.S. government report showed a jump in demand for diesel and heating oil.

Meanwhile, the Federal Reserve Bank of Philadelphia said in a report earlier that its manufacturing index rose to an eight-month high of 8.1 in December from October's reading of minus 10.7.

Analysts had expected the index to improve to a reading of minus 3.0 in December.

A separate report showed that U.S. existing home sales rose more-than-expected in November.

The National Association of Realtors said that existing home sales rose by 5.9% to a seasonally adjusted 5.04 million units in November from October's revised total of 4.76 million.

The upbeat reports came after revised data showed that U.S. gross domestic product increased at a seasonally adjusted annual rate of 3.1% in the three months to September, up from a preliminary estimate of 2.7% and above expectations for growth of 2.8%.

Also Thursday, the U.S. Department of Labor said the number of people who filed for unemployment assistance last week rose by 17,000 to 361,000, compared to expectations for an increase of 13,000 to 357,000.

Meanwhile, market players continued to monitor developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the two weeks left before the deadline.

Doubts over whether a deal will be reached ahead of the year-end deadline intensified Wednesday after a spokesman for President Barack Obama said that the White House would veto a tax and spending proposal presented by House Speaker John Boehner.

Without a deal, the U.S. could fall back into recession and drag much of the world down with it.

The U.S. is the world's biggest oil-consuming country, responsible for almost 22% of global oil demand.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery shed 0.25% to trade at USD110.09 a barrel, with the spread between the Brent and crude contracts standing at USD20.35 a barrel. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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