Brent oil steady around $103 with U.S. data on focus

Brent oil remained steady around $103 a barrel on Thursdays Asian session. The surprising drop in U.S. Crude Oil Inventories reported on Wednesday boosted WTI above 94$ and Brent surpassed the $104 mark. Gains, however, were curbed by worries that the U.S. central bank may reduce its Quantitave Easing program as key employment data is due on Thursday and Friday.

On the New York Mercantile Exchange, Brent oil for July delivery traded at $103.11 a barrel at 6:00 GMT, up 0.25% on the day, which marked a decline compared to yesterdays $104 price following EIAs crude reserves report.

WTI crude July futures traded at $93.90 a barrel at 6:01 GMT, gaining 0.17% on the day, also lower than yesterdays values of above $94.

Ric Spooner, a chief market analyst at CMC Markets in Sydney, said for Bloomberg: “The increase in refinery capacity and drop in supply in the U.S. is a supportive factor for the market. Seasonally, this is what starts to happen.”

According to the Energy Information Administration’s report, U.S. Crude Oil Inventories dropped surprisingly by 6.267 million barrels in the week ending June 2. This is a significant decrease, compared to the preceding week’s 3 million barrels gain. Final value mismatched forecasts of an 800 000 barrel decline, which caused WTI crude prices to surge above $94 per barrel and Brent oil surpassed $104.

U.S. gasoline stockpiles also fell by a seasonally adjusted annual rate of 366 000 barrels, compared to a decrease of 1.541 million barrels during the week ending May 26. Final estimates missed forecasts of a 1 million barrels increase in gasoline reserves.

Oils gains were limited as investors remained cautions ahead of key employment data, scheduled for Thursday and Friday. U.S. Initial Jobless Claims, due at 12:30 GMT, are supposed to bring some preliminary data about the labour market in the worlds biggest economy. Later on Friday, Change in Non-Farm Payrolls, Average Hourly Earnings and the Unemployment Rate will shed some light on the health of the U.S. economy, thus dampening or sharpening expectations about Feds monetary stimulus program.

Investors market moves have been largely tracking news on the Quantitave Easing as its a key factor for dollars strength. And since all dollar-priced commodities are determined by the greenback in an inverse relation, key U.S. economy indicators, when mismatching forecasts, tend to cause wide fluctuations on the commodities market.

Victor Shum, vice president of energy consultancy IHS Energy Insight said for Reuters: “One the one hand, we saw a substantial drop in U.S. crude inventories. But a major pullback in U.S. equity markets because of worries over the Feds stimulus countered the bullishness of the inventory data. Therefore, oil is in a holding pattern.”