Crude oil edges higher as Cyprus remains in focus

Published 03/28/2013, 11:16 AM
Updated 03/28/2013, 11:19 AM
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Investing.com - Oil prices edged higher in U.S. trading on Thursday, as weak U.S. data sparked fresh concerns over the strength of the country's economic recovery, while investors continued to observe developments in Cyprus and Italy.

On the New York Mercantile Exchange, light sweet crude futures for delivery in May traded at USD96.69 a barrel during U.S. morning trade, up 0.11%.

In the U.S., data showed that the Chicago purchasing managers' index slid to 52.4 in March, from a reading of 56.8 the previous month, compared to expectations for a decline to 56.5.

The report came after official data showed that the number of people who filed for initial unemployment assistance in the U.S. rose by 16,000 to a seasonally adjusted 357,000 last week, compared to expectations for an increase to 340,000.

A separate report showed that U.S. gross domestic product expanded at an annual rate of 0.4% in the three months to December, lower than forecasts for a 0.5% expansion.

The growth rate was the slowest since the first quarter of 2011, but was higher than initial estimates for growth of 0.1%.

The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.

Meanwhile, investors remained cautious as banks in Cyprus reopened for the first time in almost two weeks with strict capital controls in place. Cypriot banks had been closed since March 16 amid fears of a bank run while bailout talks were under way.

Investors remained wary that the bailout deal for Cyprus could set a precedent for future bailouts in larger euro zone states, with big bank depositors and senior bond holders forced to suffer losses.

Separately, Italy saw borrowing costs rise amid growing doubts over whether a stable coalition government can be formed amid an ongoing political deadlock.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery slid 0.30% to trade at USD109.37 a barrel, with the spread between the Brent and crude contracts standing at USD12.68 a barrel.


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