Crude oil futures higher despite weak U.S. data

Forexpros - bsp;- Crude oil futures advanced Wednesday despite downbeat U.S. economic data and continued euro zone debt worries. On the New York Mercantile Exchange, light sweet crude futures for March settlement traded at USD101.03 a barrel during late U.S. trade adding 0.16%It earlier climbed to USD102.23 a barrel adding 1.1% to trade at the highest level since last Thursday. Weakness in the U.S. dollar helped lift crude oil prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.75% to trade at 80.74. Dollar weakness generally lifts commodity prices, as it increases their appeal as an alternative asset and makes dollar priced commodities less expensive for holders of other currencies. Crude prices climbed despite the U.S. Bureau of Labor Statistics reporting that the PPI declined by an adjusted 0.1% in December, missing expectations for a 0.1% gain, bringing the annualized rate to 4.8%. However, core PPI rose 0.3% in December booking the fastest increase since June 2009. A separate report indicated that industrial production in the U.S. climbed less than expected in December, while the previous figure was downwardly revised, showing a larger decline. Meanwhile, positive news from Greece that a solution was near in the private creditor/government debt talks lifted euro zone optimism on the session. Crude oil prices continue to draw support from Iranian supply fears. European Union foreign ministers are scheduled to meet January 23rd to decide on the embargo. Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery fell 0.58% to trade at USD110.88 a barrel, up USD9.85 on its U.S. Counterpart. This nearly USD10.00 spread is near historic highs. The two contracts traditionally trade within USD1.00 of each other.
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