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Crude gains on escalating Ukraine crisis, robust U.S. data

Published 08/29/2014, 02:34 PM
Updated 08/29/2014, 02:37 PM
Crude gains on U.S. data, though global supply concerns point to monthly decline

Investing.com - Escalating tensions in eastern Ukraine sent oil prices rising on Friday, while upbeat U.S. consumer sentiment data boosted the commodity as well.

In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in October traded up 1.48% at $95.95 a barrel during U.S. trading. New York-traded oil futures hit a session low of $94.49 a barrel and a high of $95.99 a barrel.

The October contract settled up 0.71% at $94.55 a barrel on Thursday.

Nymex oil futures were likely to find support at $92.50 a barrel, Thursday's low, and resistance at $98.45 a barrel, the high from Aug. 8.

Oil prices were up for a third consecutive session Friday on reports that Russian troops have entered Ukraine to assist pro-Moscow separatists, which sparked concerns that fresh sanctions could be slapped on Russia's energy sector.

Upbeat U.S. data supported oil as well on Friday, though the commodity was still set to post a monthly loss due to sentiments that despite improvements taking place in the U.S. economy, the global economy is awash in crude.

In the U.S. earlier, the Thomson Reuters/University of Michigan revised consumer sentiment index came in at 82.5 this month, up from a preliminary reading of 79.2 and exceeding expectations for a reading of 80.1.

July's final reading came in at 81.8, and the uptick in the final August reading gave oil support as consumer spending drives the bulk of U.S. economic output.

Separately, data revealed that the Chicago-area purchasing managers' index rose to 64.3 in August from 52.6 in July, beating expectations for an increase to 56.0.

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On a less positive note, the Bureau of Economic Analysis reported that U.S. personal spending fell 0.1% last month, confounding expectations for a 0.2% rise, after an increase of 0.4% in June.

On Thursday, the Commerce Department reported that U.S. economy grew at a revised annualized rate of 4.2%, up from a preliminary estimate of 4.0% and better than market forecasts for a downward revision to 3.9%.

Meanwhile in oil-rich Canada, the country's gross domestic product expanded by 0.3% in June, in line with expectations. Year-on-year, Canada's economy grew by 3.1% in June, beating expectations for a 2.7% expansion.

Separately, on the ICE Futures Exchange in London, Brent oil futures for October delivery were up 0.73% at US$103.21 a barrel, while the spread between Brent oil and U.S. crude contracts stood at US$7.26 a barrel.

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