Crude In Tight Range Around $95.80, Heads For The Longest Weekly Advance

Although crude is trading in a tight range around the $95.80 per barrels level as some investors liquidate their positions ahead of the weekend, prices are heading for the seventh weekly advance, the longest run of gains in almost four years.

Sentiment found support as the manufacturing data from the U.S. and China, the world's largest oil consumers, grew this month at the quickest pace in about two years while Germany’s PMI index suggested growth in Europe’s largest economy is picking up.

“Economic statistics from the U.S. and China support an outlook of moderate growth in 2013 against a backdrop of a lower risk environment. Any improvement in industrial demand will help the overall oil demand,” said Ric Spooner from CMC Markets in Sydney.

In addition to the encouraging manufacturing data, employment in the United States also improved as the jobless claims dropped to a five-year low last week, while crude stockpiles at Cushing, Oklahoma, dropped last week for the first time since November.

According to the Energy Department report released yesterday, a day later than usual because of the Martin Luther King Jr. Day holiday on January 21, stockpiles at Cushing fell by 471,000 barrels last week compared with forecasts to increase 2.2 million barrels.

Cushing is the delivery point for West Texas Intermediate (WTI) oil. Gasoline inventories slipped by 1.7 million barrels last week, with forecasts to increase 1.3 million barrels, while distillate stockpiles, which include heating oil and diesel, rose 508,000 barrels.

Crude is trading as of this writing around $95.80 a barrel compared with the opening at $95.93 and with the highest at $96.00 and the lowest at $95.74. Crude finds on the short term resistance at $96.50 and support at $95.35.

Markets will be eying today Germany’s IFO business climate for January, UK’s fourth quarter GDP, Canada’s December consumer prices, as well as the U.S.’s new home sales for December.

Investors will also be closely watching the Seaway oil pipeline after the amount of oil moving through it was cut by half on Wednesday, amid rising inventories which already are at record highs. This pipeline takes crude from Cushing to the U.S. Gulf Coast.

Worries of a possible supply disruption from North Africa are rising. The British, German and Dutch governments urged their citizens to leave the Benghazi yesterday amid increased threats, although Libya is increasing security at oil and gas installations.

Brent is trading as of this writing around the $113.12 after falling 0.14%; natural gas is trading at $3.477 per 1,000 cubic feet after rising 0.90%; gasoline is trading at $2.856 a gallon after falling 0.24%; heating oil is trading at 3.0848 after falling 0.05%.