Brent near one-week high of $104 on U.S. data

Business & Markets 2013
Written by Reuters
Wednesday, 29 May 2013 15:38
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CHENNAI (May 29): Brent crude futures steadied on Wednesday near a
one-week high above $104 per barrel, as upbeat U.S. housing and
consumer confidence data sparked expectations of improved demand
from the world's top consumer.
"People are starting to realise that the United States has got to lead us
out of this economic slump," said Tony Nunan, an oil risk manager at
Mitsubishi Corp in Tokyo.
"The main worries are unemployment and housing, and housing seems
to be on a steady growth path. That and the geopolitical risk is keeping
prices supported."
Front-month Brent futures slipped 23 cents to $103.99 per barrel by
0657 GMT, after rising more than $2 in the previous session to the
highest since May 21. U.S. crude shed 40 cents to $94.61.
Data on Tuesday showed that U.S. home prices accelerated in March
by the most in nearly seven years as spring buying gave the sector
traction, while surging consumer confidence pointed to a resilient
recovery.
Worries about global economic health, particularly after poor
manufacturing numbers out of China, and fears that the U.S. Federal
Reserve may begin scaling back its easy money programme have
weakened oil markets this year.
Brent is down more than 12 percent from this year's high of more than
$119 in February, while U.S. crude has lost more than 3 percent from its January high above $98.
"Macro factors remain a headwind for oil prices," Morgan Stanley analysts said in a note. "However, we continue to see
fundamental support for higher prices this summer."
The worsening conflict in Syria has kept concerns simmering over supply from the Middle East.
Britain and France said on Tuesday they did not have to wait until Aug. 1 to arm rebels fighting Syrian President Bashar
al-Assad, and Russia said it would not scrap plans to deliver an air defence system to the conflict-ridden nation.
U.S. oil prices may also be supported by crude inventory data that is likely to show commercial crude stockpiles fell for a third
consecutive week on lower imports and higher refinery activity.
The American Petroleum Institute releases inventory numbers on Wednesday, with figures from the Energy Information
Agency due on Thursday.
Technical indicators point to a drop for oil. Brent is expected to retrace to $103.29, while U.S. crude may drop to $94.07 per
barrel, said Reuters technical analyst Wang Tao. - Reuters