The extent to which oil is based on investor perception of demand and supply was illustrated on February 13, as the price of these key energy futures was pushed higher as markets responded to a report revealing that the nation's crude supplies rose by less than anticipated during the week ending February 8.
Rising oil futures
MarketWatch reports that March crude trading on the New York Mercantile Exchange rose above $98 per barrel before tracking lower. The Associated Press reports that the March oil contract later traded at $97.01 per barrel. At the time, London-traded Brent crude was 1 cent lower at $118.65 a barrel on the ICE Futures exchange.
U.S. crude supplies
Data contained in the weekly report of the U.S. Department of Energy's Energy Information Administration (EIA) revealed that during the week, the nation's supply of crude rose 600,000 barrels to 696 million, which represented a 0.2 percent gain.
The figure for the increase in these reserves fell far short of the predictions made by analysts working for Platts, who predicted that the supply would add 2.5 million barrels during the week, according to the media outlet.
Alternate supply measures
Data contained in the EIA report revealed that the reserves of distillates plunged 3.7 million barrels during the week, and that the supply of motor gasoline dropped 800,000, MarketWatch reports.
According to The Associated Press, market participants may have been surprised by the EIA data indicating that the nation's oil reserves increased at all. Data contained in a report released on February 12 by the American Petroleum Institute (API) stated that during the week ending February 8, U.S. oil reserves fell 2.3 million barrels. The data garnered for this document differs from the information culled for the EIA in that participants offer their data to the API voluntarily.
In addition to this estimate that the country's supply would drop, the Paris-based International Energy Agency lowered its predictions for global oil consumption in 2013. The organization predicted that global crude oil demand would total 90.7 million barrels for every day of the year, which represents a decline of 85,000 barrels per day from the figures released last month.
The Associated Press reports that data related to U.S. retail sales will also be important to global market participants looking to determine how healthy the nation's economy is. Retail sales benefited from growth in December during the crucial holiday season. However, there is speculation that this key economic indicator could lose some of its strength as consumers adjust to the new tax structure that leaves less in their paychecks at the end of every week.
"January's retail sales report is eagerly anticipated as it will provide the first real guide to how the payroll tax hike affected spending," Paul Dales of Capital Economics wrote, according to the news source.
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