Blast in Iraq and Strong US Data Support Oil

Commodities traded within a narrow range but with a mildly positively tone. Unexpected decline in initial jobless claims in the US, together with better-than-expected confidence data, sustained the market. Intensified geopolitical tensions in oil producing countries also supported oil prices. The front-month contract for WTI crude oil climbed to as high as 100.05 before settling at 99.53, up +0.87%, while Brent crude contract closed largely flat at 107.89.

Bombings in Baghdad killed about 60 people and over 100 injured. It's suspected that the blast was due to tensions between Shiite and Sunni Muslims. The case raised concerns over the oil supply outlook. According to Hussain al-Shahristani, Deputy Prime Minister for Energy Affairs, Iraqi crude oil production has exceeded 3M bpd, the highest level in at least 20 years. al-Shahristani stated that 'Iraq's crude production will rise to 3.4M bpd by the end of next year, and exports will rise to 2.6M bpd, including 175K barrels from fields in the northern Kurdish region, next year from a current average of 2.2M bpd of oil a day'.

Like us on Facebook

The market was rather quiet yesterday, making encouraging economic data from the US the major driver of prices. Initial jobless claims surprisingly fell to 364K, the lowest level since April 2008 in the week ended December 17 from 366K a week ago. The market had anticipated a rise to 375K. Continuing claims also dropped -79K to 3.55M, the lowest level since September 2008, in the week ended December 10. University of Michigan Confidence was revised higher to 69.6 in December from 67.7 in the prior month. This was compared with consensus of a milder increase to 68.2. Moreover, leading indicators climbed +0.5% in November, following a +0.9% gain in October. The market had anticipated an increase of +0.3%.

The US durable goods orders probably gained +2.2% in November after contracting -0.7% in October. The reading excluding transportation probably climbed +0.4%, easing from +0.7% a month ago. The US will also report personal income and spending today. Both are expected to have gained +0.3% in November. New home sales might have increased +0.95% to 313K in November.

Source: http://www.ibtimes.com/articles/271924/20111223/blast-iraq-strong-data-support-oil.htm

wade phillips wade phillips new orleans hornets chris paul time person of the year sag nominations sag nominations