Crude futures rebound on better than expected US retail sales and US jobless claims data

Oil prices retreated early in the day after a closely watched inventories report from the Energy Information Administration (EIA) that came out yesterday confirmed Tuesday’s bearish data from the American Petroleum Institute (API), saying that US crude stockpiles increased by 7.2 mmbbls (million barrels) compared to an expected rise of just 1.7 mmbbls. EIA said that gasoline inventories declined by 2.7 mmbbls, while distillates, which include heating oil, dropped 2.4 mmbbls.
API reported a 7.5 mmbbls rise in crude stockpiles, adding that gasoline stocks fell 81,000 barrels, while distillates declined by 2.5 mmbbls.
Last week’s higher than expected stockpile increases reflected lower demand, pushing down the prices. Crude was also pressured by a stronger US dollar, which gained against the euro after Fitch downgraded Portugal’s sovereign debt to AA-. A stronger American currency makes dollar denominated commodities including crude more expensive for holders of other currencies, curbing demand.
Later in the day, however, crude improved after European stock markets climbed despite an expected flat start, while futures for US stocks rose on today’s positive economic data.
The markets got support from today’s UK retail sales update, which showed a month on month growth of 2.1% following a 3.5% decline in February. Another bullish update came out later in the US, revealing a steeper than expected decline of 14,000 in initial jobless claims last week to 442,000.
The FTSE 100 added 0.5% by mid afternoon, while the Dow Jones Industrial Average is currently projected to open with a 0.4% gain to recoup yesterday’s losses.
May Brent Crude stopped just within 3 cents of US$80/barrel in London, while US light, sweet crude eclipsed US$81/barrel on the New York Mercantile Exchange (NYMEX).
Blue chip oil and gas producers were mixed. Supermajors BP (LSE: BP) and Shell (LSE: RDSB) posted marginal losses, while Tullow Oil (LSE: TLW) gained nearly 1% and Cairn Energy (LSE: CNE) climbed 2.2%. BG Group (LSE: BG) was flat.
Petrofac (LSE: PFC) made little headway, while fellow oil and gas engineering firm Amec (LSE: AMEC) advanced 1.5%.
Midcaps mostly rose. Premier Oil (LSE: PMO) advanced 3% to take the lead, while Salamander Energy (LSE: SMDR) and Heritage Oil (LSE: HOIL) followed with gains of 1.4% and 1.1% respectively. Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) tacked on nearly 1%. Melrose Resources (LSE: MRS) added less than 1%, while Soco International (LSE: SIA) was flat and JKX Oil & Gas (LSE: JKX) shed less than 1%.
North American based explorer Nighthawk Energy (AIM: HAWK) and Mongolia-focused Petro Matad Ltd (AIM: MATD) led the juniors with gains of 9% and 7.5% respectively.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) and Europe focused oil and gas developer Ascent Resources (AIM: AST) headed in the opposite direction, slipping 9% and 6.7% respectively.

http://www.proactiveinvestors.co.uk/companies/news/14875/crude-futures-rebound-on-better-than-expected-us-retail-sales-and-us-jobless-claims-data-14875.html