Crude Oil Settles Higher Ahead Of Supply Data

(RTTNews) - U.S. crude oil snapped a three-day loss to end higher on Tuesday, ahead of the U.S. supply data which investors expect will show a decline in crude stockpiles, signaling the nation's shale oil companies are ramping down production. Official data from the U.S. Energy Information Administration has shown stockpiles to have dropped for the last six consecutive weeks.

The American Petroleum Institute is scheduled to publish its weekly U.S. oil inventories report later today, followed by official data from the U.S. Energy Information Administration on Wednesday.

Nonetheless, the gains were capped as the dollar strengthened on some mixed economic data from the U.S. with building permits, an indicator of future housing demand, surging 11.8 percent in May. Nevertheless, housing starts in the U.S. pulled back more than expected in May, after reporting a sharp jump in new residential construction in the previous month.

Crude stockpiles have been falling for the past month after having soared to record highs earlier in the year.

Investors also kept a close watch on the developments in Europe with possibilities of Greece defaulting on its debt repayment later this month.

As the Federal Reserve makes its next interest rate decision Wednesday, the dollar could strengthen if policy makers signal an interest rate hike is imminent, potentially weighing on oil prices. Most economists expect the Fed to signal that the first rate hike is not far off, most likely in September.

Light Sweet Crude Oil futures for July delivery, the most actively traded contract, gained $0.45 or 0.8 percent, to settle at $59.97 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for July delivery scaled a high of $60.37 a barrel intraday and a low of $59.42.

On Monday, crude oil dropped $0.44 or 0.7 percent, to settle at $59.52 a barrel, on concerns of a supply glut with the Organization of the Petroleum Exporting Countries continuing to ramp up its production.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.01 on Tuesday, up from its previous close of 94.84 on Monday in late North American trade. The dollar scaled a high of 95.23 intraday and a low of 94.56.

The euro trended lower against the dollar at $1.1242 on Tuesday, as compared to its previous close of $1.1284 in North American trade late Monday. The euro scaled a high of $1.1331 intraday and a low of $1.1206.

On the economic front, a Commerce Department report on Tuesday showed housing starts pulled back more than expected in May, after reporting a sharp jump in new residential construction in the U.S. in the previous month.

Housing starts tumbled 11.1 percent to an annual rate of 1.036 million in May after surging 22.1 percent to a revised 1.165 million in April. Economists expected starts to drop to an annual rate of 1.090 million from the 1.135 million originally reported for the previous month.

Meanwhile, the report also said building permits, an indicator of future housing demand, jumped 11.8 percent to an annual rate of 1.275 million in May from the revised April rate of 1.140 million. Economists expected permits to drop to a rate of 1.105 million.

Eurozone employment increased slightly in the first quarter, Eurostat reported Tuesday. Employment rose 0.1 percent from the prior quarter, the same rate of growth as seen in the fourth quarter.

Germany's investor sentiment weakened for a third straight month in June to its lowest level in seven months as fears of a 'Grexit' intensified. The ZEW Indicator of Economic Sentiment fell more-than-expected to 31.5 from 41.9 in May, survey data from the Mannheim-based Centre for European Economic Research, or ZEW, showed Tuesday.

Economists had expected a reading of 37.3. The latest score was the lowest since November, when the reading was 11.5.

Germany's consumer prices increased for the fourth straight month in May at the fastest pace in seven months, as initially estimated, final data from the statistical office Destatis showed Tuesday. Consumer prices rose 0.7 percent from last year, following a 0.5 percent increase in April. The annual increase matched the preliminary estimate published on June 1.

The decline in U.K. consumer prices proved to be short-lived as they increased in May, while factory gate prices continued its downward trend, official data revealed Tuesday. Consumer prices rose 0.1 percent from last year as expected by economists, offsetting April's 0.1 percent fall, which was the first drop since 1960, the Office for National Statistics reported. This was the first rise in four months.

Another report from ONS showed U.K. factory gate prices decreased for the eleventh consecutive month in May mainly driven by petroleum and crude oil prices. Output prices dropped 1.6 percent from a year ago, in line with forecast, and slower than a 1.7 percent decrease in April. As expected, output prices edged up 0.1 percent for the third straight month on a monthly basis in May.