Crude Oil Ends Higher Ahead Of Inventories Data

(RTTNews) - U.S. crude oil climbed off its six-year lows to end sharply higher Tuesday, ahead of the official weekly crude oil inventory report on Wednesday and some upbeat economic data from the U.S. with housing starts in July rising to an eight-year high.

However, supply glut worries persisted with evidence that global markets are severely oversupplied, even as OPEC countries continue to relentlessly pump more oil in a bid to throttle competition from U.S. shale producers.

The oversupply situation may only get worse when Iran oil begins to flow into global markets upon the end of sanctions against Tehran.

Worries over declining demand from China also persisted, with the slowing of its economy, although Beijing continues to lift its stimulus efforts to prop up the ailing economy.

In economic news, a Commerce Department report on Tuesday showed housing starts in the U.S. to have risen to a nearly eight-year high in July, while indicating a sharp drop in building permits.

U.S. crude oil stockpile data from the American Petroleum Institute is due later today, while official figures from the Energy Information Department is scheduled for Wednesday morning.

Light Sweet Crude Oil futures for September delivery, the most actively traded contract, jumped $0.75 or 1.8 percent, to settle at $42.62 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for September delivery scaled a high of $42.90 a barrel intraday and a low of $41.43.

On Monday, crude oil futures for September delivery, shed $0.63 or 1.5 percent, to close at $41.87 a barrel, on renewed supply glut worries with increasing output from the Middle East and increased rig count in the U.S. suggesting growing domestic output.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.02 on Tuesday, up from its previous close of 96.82 in late North American trade on Monday. The dollar scaled a high of 97.07 intraday and a low of 96.68.

The euro trended lower against the dollar at $1.1024 on Tuesday, as compared to its previous close of $1.1078 in North American trade late Monday. The euro scaled a high of $1.1095 intraday and a low of $1.1020.

In economic news, a Commerce Department report showed housing starts in the U.S. inched up by 0.2 percent to an annual rate of 1.206 million in July from the revised June estimate of 1.204 million. Economists expected housing starts to climb to a rate of 1.180 million from the 1.174 million originally reported for the previous month.

Meanwhile, the report said building permits, an indicator of future housing demand, plunged 16.3 percent to an annual rate of 1.119 million in July after jumping to an eight-year high of 1.337 million in June. Building permits had been expected to pull back to a rate of 1.230 million from the 1.343 million originally reported for the previous month, reflecting an 8.4 percent decrease.

From Europe, the number of persons in employment in Germany increased further in the second quarter, but at a slower pace, preliminary figures from Destatis showed Tuesday. Total number of employed persons in the country rose 0.4 percent, or by 175,700 persons, to 42.8 million in the second quarter from the corresponding period last year. This was lower than the 0.6 percent hike logged in the first quarter.

U.K. consumer prices rose unexpectedly in July on smaller discounts on clothing prices during summer sales, while core inflation reached a five-month high, the Office for National Statistics revealed Tuesday. Consumer prices advanced 0.1 percent in July from last year, while they were expected to remain flat as seen in June.

House price inflation in the United Kingdom accelerated marginally in June, after remaining stable in the previous month, figures from the Office for National Statistics showed Tuesday. Average house prices rose 5.7 percent year-over-year in June, following a 5.6 percent increase in May, revised down from the 5.7 percent hike estimated earlier.