Brent Crude Oil Prices Exceed $113 amid Robust Economic Data

Brent crude oil prices remained at levels over $113 on Tuesday amid signs of growth in budgeted spending among U.S. businesses. These encouraging signs were observed a month ago, bolstering hopes that economies in general are on the mend.

Market traders, however, continue to be vigilant pending publication of official economic data from the U.S. and China in the next few days.

Meanwhile, U.S. crude oil prices went up by almost 20 cents and closed at $96.63. Prices of Brent crude inched up by 8 cents to $113.56 pb.

A fund manager working with an investment firm in Tokyo, Japan said that market traders are anticipating the outcome of this Wednesday’s scheduled meeting among committee members of Federal Reserve policy board. Traders are also awaiting this Friday’s payroll report.

This early in the week, positive economic data from the U.S. is already underway. Positive data published last month helped increase anew the market’s interest in investing.

Last month also saw a slight increase in demand for non-defense goods according to the U.S. Commerce Dept.

Threats of possible cuts in government expenditures and imposition of additional taxes last year led economists to believe that there will be a slack in investments this year. However, this scenario seemed to have taken a different turn as Congress made an effort to derail these programs. In fact, reports sent out on Monday reveal that the economy seems to have improved, and firms started to perceive a growth in demand.

Meanwhile, a group believed to be Islamist supporters violently struck an oil facility located in the north of Algeria. Two were killed and seven others were injured. Similarly, Egyptian activists marched to the city streets near the Suez Canal while resisting a recently imposed state of emergency.

Amid these tensions, the year 2013 will see global oil markets being adequately supplied with crude oil. OPEC Secretary-General Abdullah al-Badri also disclosed that the oil cartel might eventually decide against oil cuts.

He added that the oil supply for this year is well-balanced, thus a drop in the crude oil price per barrel is unlikely to occur.

Meanwhile, prices of gasoline reached a record high for almost 3 months as reports about the shutdown of an oil facility in the northeast started to circulate. This could also restrict oil supplies in the region, which might inevitably turn to Gulf Coast suppliers.

American oil refiners usually maintain higher gas inventory during spring in preparation for the high demand in the summer months. Analysts say that the recent shutdown could also restrict gasoline supply during those critical months.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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