WTI headed to a third weekly gain in June

Oil pared earlier daily gains and plunged towards the red scale as unexpectedly upbeat U.S. consumer confidence gave a strong boost to the U.S. dollar, after which a rebound followed. Meanwhile, Jeffrey Lacker, Richmond Fed president, said during his speech that he doesnt support Feds Quantitative Easing.

On the New York Mercantile Exchange, WTI crude for August delivery traded at $97.44 a barrel at 14:59 GMT, up 0.40% on the day after going beyond the even point minutes after the Final University of Michigan Confidence indicator was published. Light, sweet crude varied in a wide range between days high and low of $97.82 and $96.55 per barrel respectively.

Meanwhile, Brent oil August futures traded at $103.07 a barrel, up 0.24% on the day at 14:59 GMT. The European benchmark fell towards the red scale, after which it rebounded, but is still poised for a third quarterly loss. Brent prices ranged today between days high and low at $103.42 and $102.45 respectively.

West Texas Intermediate is headed for a third weekly gain in four, supported by positive U.S. and Germany economy data that is boosting demand prospects. Germanys retail sales both on monthly and annual basis exceeded expectations and gained 0.8% and 0.4% respectively. The leading EU nations Preliminary CPI also outperformed projections on both annual and monthly basis, standing at 1.8% and 0.1% respectively, compared to 1.7% and 0.0% forecasts.

Meanwhile in the U.S., the Chicago PMI disappointed by mismatching forecasts of 55.0 figure, standing well below at 51.6, also worse than Mays 58.7 reading. However, that bit of negative data was offset by the Final University of Michigan Confidence, which exceeded expectations of a gain to 83.0 and instead rose to 84.1, up from Mays 82.7.

Andrey Kryuchenkov, an analyst at VTB Capital in London said for Bloomberg: “Oil trading is mostly macro-driven today. He expects WTI to meet the “very strong resistance” of $99 a barrel.

Oil prices were supported yesterday by positive U.S. data, which pointed at sustainable recovery of the country’s economy, offsetting Wednesday’s disappointing Q1 GDP reading. According to the Department of Labor, Initial Jobless Claims mismatched projections of a 10 000 decrease by 1 000. The number of people who filed for unemployment assistance in the U.S. last week fell to a seasonally adjusted 346 000, compared to the previous period’s 355 000 revised reading, but slightly above projections of 345 000. Personal Income for May surpassed expectations of 0.2% and surged to 0.5%, up from April’s revised 0.1% figure. Personal Spending for May met anticipations at 0.3%, well above the preceding month’s revised reading of -0.3%. Core PCE (Core Personal Consumption Expenditures) met projections both on monthly and annual basis. Core PCE for May stood at 0.1%, up from April’s 0.0% and was 1.1% higher than May 2012. Upbeat data pointed at sustainable demand prospects for oil, pushing prices up.

Victor Shum, the vice president at IHS Energy Insight, said for Bloomberg: “Right now it seems like the bulls are in control. Oil futures appear to be trading with the broader market.”

Investors are now looking ahead to next week’s key U.S. and China economic data. U.S. Non-Farm Payrolls will bring additional clarity about the state of the U.S. labor market. Meanwhile, China’s official Purchasing Managers’ Index is due on Monday. According to a Reuters poll, it should have fallen to 50, down from May’s 50.8 final reading.

Olivier Jakob, an analyst at consultancy Petromatrix in Switzerland said for Reuters: “Non-farm payrolls next Friday will set the tone on whether QE3 (U.S. quantitative easing) will ease”.