Markets: News  

Oil ends higher after supply, macro data

SAN FRANCISCO (MarketWatch) -- Crude-oil futures ended higher Wednesday, supported by a weekly U.S. supply report showing a decline in inventories and favorable U.S. macroeconomic data.

Crude oil for August delivery (CLQ2) advanced 85 cents, or 1.1%, to $80.21 a barrel on the New York Mercantile Exchange.

Prices had spent most of the Asian and European trading hours in the red, but reversed course in early U.S. trading.

Oil was trading at $80.69 prior to the inventories data, and at first it added to gains.

The Energy Information Administration reported a decline of 100,000 barrels in crude supplies for the week ended June 22.

Analysts polled by Platts had expected a decline around 1 million barrels.

The EIA also reported gasoline inventories up 2.1 million barrels on the week, and distillates supplies down 2.3 million barrels. The analysts surveyed by Platts had expected stockpiles of gasoline to rise by 300,000 barrels, and distillates to climb by 1 million barrels.

The results ran counter to a late Tuesday report by the American Petroleum Institute, which said crude-oil supplies rose by 507,000 barrels in the same week.

There was some relief that inventories report showed a decrease, however small, and oil also rose with positive U.S. durable-goods and housing data, said Carl Larry, president of Oil Outlooks & Opinions in Houston.

"We're still far from being out of the woods as far as demand ... but I think we're finding a foothold," around $80 a barrel, Larry said.

Pending home sales in the U.S. climbed 5.9% in May to a two-year high, the National Association of Realtors said Wednesday.

The Commerce Department said orders of long-lasting goods rose 1.1% in May following declines in the previous two months.

Traders were also looking to Europe ahead of a two-day leaders summit kicking off Thursday, designed to address the region's financial crisis.

Crude prices were pressured on Tuesday after German Chancellor Angela Merkel's comments seemed to put the chance of any progress at the coming EU summit closer to nil.

Merkel reportedly told members of her party that total shared debt liability in Europe wouldn't be possible in her lifetime.

Merkel spoke up again on Wednesday, telling Germany's parliament there is no quick fix for the euro-zone's debt crisis and that the introduction of euro bonds at this stage would be "economically wrong," news reports said. "Joint liability can only happen when sufficient controls are in place," Merkel said, according to Reuters.

Elsewhere in the energy complex, July gasoline (RBN2) shed 2 cents, or 0.9%, to $2.62 a gallon, while heating oil for the same month (HON2) rose 2 cent, or 0.7%, to $2.59 a gallon.

July natural gas (NGN12) gained 1 cent, or 0.3%, to $2.77 per million British thermal units. The July contract expired at the close of floor trading Wednesday.

Predictions of warmer-than-normal temperatures across the U.S. had natural gas trade as high as $2.95 per million Btus earlier.