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Crude gains on upbeat U.S. housing data

Published 05/23/2014, 01:44 PM
Updated 05/23/2014, 01:46 PM
Oil gains as U.S. new home sales exceed market expectations

Investing.com - Better-than-expected data on U.S. home sales sent oil prices rising on Friday, a day after a solid report on existing home sales painted a picture of a U.S. economy that continues to recover and will demand more fuel and energy going forward.

On the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in July traded at $104.40 a barrel during U.S. trading, up 0.64%. New York-traded oil futures hit a session low of $103.64 a barrel and a high of $104.50 a barrel.

The July contract settled down 0.32% at $103.74 a barrel on Thursday.

Nymex oil futures were likely to find support at $100.82 a barrel, Thursday's low, and resistance at $104.99 a barrel, the high from April 16.

The Census Bureau reported earlier that U.S. new home sales rose 6.4% to 433,000 units in April from 407,000 units in March, whose figure was revised up from a previously estimated 384,000. Analysts had expected new home sales to rise to 425,000 units last month.

A day earlier, the National Association of Realtors reported that existing home sales increased 1.3% in April to an annual rate of 4.65 million units, and hopes that the U.S. housing sector is improving strengthened demand for oil on Friday.

Data out of Chine supported oil prices as well.

A preliminary reading of China’s HSBC manufacturing purchasing managers' index rose to a five-month high of 49.7, beating expectations for a 48.1 reading.

Still, the figure remained below the 50 mark separating contraction from expansion, which capped gains somewhat.

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China is the world's second-largest consumer of crude after the U.S., where solid data curbed oil's losses as well.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for July delivery were up 0.16% and trading at US$110.54 a barrel, while the spread between the Brent and U.S. crude contracts stood at US$6.14 a barrel.

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