Crude oil prices are getting a continued boost on the view that U.S. economic prospects appear healthier currently than for some considerable time.
Factors driving oil today include orders for U.S. durable goods — those supposed to last at least three years — increasing by 3% in December compared to consensus market forecast of a 2% rise.
Following a revised 4.3% gain in November, the strong figure was led by demand for aircraft, automotives and business equipment, signalling that further gains in manufacturing may well be on the cards.
From here, oil’s upward price momentum is getting stronger on the revelation that Tropical Cyclone Iggy has reduced Australian oil output this week by as much as 100,000 barrels a day, or about a quarter of the country’s average production last fiscal year.
The storm will strengthen to Category 3 tomorrow, the third-strongest on a five-step scale.
Ongoing concerns over Greek debt talks remain a negative note for crude and the security threat around the Strait of Hormuz is a wild card.
One new negative was the unexpected fall in December in the sales of new homes in the U.S. for the first time in four months, with purchases of single-family properties declining by 2.2%, to a 307,000 annualized figure.
Analysts had expected an annualized figure of 321,000. The end-of-year number makes 2011 the worst year for the housing industry since 1963.
by Simon Watkins for Emerging Money