And no, it's not just because of the tax-free environmentApril 15, 2015 9:29
Brent steady above $113 ahead of key Europe, U.S. data
Asian shares steady in ranges before U.S., euro zone numbers; U.S. crude stocks seen down on lower imports, falling for third week; Brent looks neutral in $113.14-$114.68 range
August 14, 2012 12:00 by Reuters
Brent futures held steady above $113 on Tuesday as investors awaited GDP data out of two of Europe’s powerhouse economies to gauge the region’s energy demand outlook, while tensions in the Middle East supported prices.
A steeper than expected drop in growth numbers from France and Germany could boost the dollar, in turn weighing on commodities which are priced in the greenback. On the other hand, intensifying debate in Israel on whether to strike Iran’s disputed nuclear programme stoked fears of a military conflict, providing a floor on oil.
Brent crude had slipped 28 cents to $113.32 a barrel by 0409 GMT, after settling 65 cents up at its highest settlement since May 3. U.S. crude gained 5 cents to $92.78, after ending 14 cents lower.
“The immediate impact of the European growth numbers will be on the forex market and oil will react to that,” said Ryoma Furumi, a commodities sales manager at Newedge Japan.
“Oil prices are high because of the Israel situation and a lot will depend on how that turns out.”
French preliminary second-quarter annual gross domestic product is seen contracting by 0.4 percent after a 0.1 percent rise the previous quarter, while Germany’s growth for the same period is forecast at 1.0 percent after growth of 1.7 percent previously.
Investors across markets stayed on the sidelines with Asian shares steadying and the euro holding on to gains, while gold inched up on expectations that further weakness in the global economy could prompt central banks to initiate more measures to stimulate growth.
Apart from European growth numbers, retail sales data due from the United States for July will give an indication on the health of the world’s biggest economy. Economists in a Reuters survey expect a 0.3 percent rise compared with a 0.5 percent decrease in June.
“Investors will be looking for a positive retail sales number in July to turn around a succession of weaker months,” Ric Spooner, chief market analyst at CMC Markets, said in a note.
Brent will trade between $111 and $115 a barrel unless the situation in the Middle East worsens, while the U.S. benchmark will swing in a $2-a-barrel range, Newedge’s Furumi said.
Apart from tensions in the Middle East, a fall in North Sea production of about 17 percent in September from August, mainly due to a drop in Forties crude output may also support the European benchmark.
Analysts at ANZ said in a daily note that Brent may stabilise in a $110-115 range, with the increase in tension in the Middle East or a steeper decline in North Sea output bringing “the $120 technical target into play”.
Brent looks neutral in a range of $113.14-$114.68 per barrel, according to Reuters technical analyst Wang Tao, with any escape pointing to future direction. He added that U.S. oil was biased to fall more to its Aug. 10 low of $91.71.
U.S. CRUDE STOCKS
U.S. crude stocks data due later in the day from industry group the American Petroleum Institute (API) should also provide pointers on demand growth in the world’s largest oil consumer.
U.S. crude stockpiles were forecast to have fallen by 1.6 million barrels in the week to Aug. 10, declining for a third straight week on lower imports, a preliminary Reuters poll of seven analysts showed on Monday.
The API data will be followed by more closely watched numbers from the U.S. Energy Department on Wednesday.
(Reporting by Manash Goswami; Editing by Joseph Radford)