New York, February 29th (TradersHuddle.com) – It was comments, or lack thereof, from Federal Reserve Chairman Ben Bernanke regarding a third quantitative easing package that slammed gold today. However, the Fed’s Beige Book report, among other economic data points, helped oil snap a two-day losing streak. NYMEX-traded West Texas Intermediate added 52 cents to close at $107.07 a barrel. In London, Brent crude added $1.11 to finish at $122.66. Brent finished February higher by 10.5% while WTI added almost 9% for the month.
U.S. crude inventories leaped 4.16 million barrels in the week to February 24, up for a second straight week, the U.S. Energy Information Administration said, according to Reuters. That’s well above the increase of 1.1 million barrels analysts expected. While oil demand remains slack, the Commerce Department did revise its fourth-quarter GDP growth estimate to 3% growth from 2.8%. The U.S. economy grew at a pace of 1.8% in the third quarter of 2011.
The Institute for Supply Management-Chicago's business index rose to 64 in February from 60.2 in January, beating the reading of 61.5 economists expected. Both data points helped oil’s cause on the day when stocks were lower, and the U.S. dollar index was higher.
Despite weak demand and higher output from OPEC, oil prices remain stubbornly high, indicating it is, in fact, speculators that are controlling the market. OPEC has reportedly pumped more crude this month than any month since October 2008, Reuters reported. Libya has restored some of its lost production and other member states looked to take advantage of high prices by increasing production.
Weakness in the Dow Jones Industrial Average weighed on Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) today, but on the bright side for Chevron, the stock is just pennies away from a new 52-week high and Deutsche Bank raised its rating on the stock to "buy" from "hold" today while boosting its price target to $130 from $115, implying decent upside in the shares. ConocoPhillips (NYSE: COP), the third-largest U.S. oil company, lost almost 1% today. Deutsche upgraded that name earlier this month.
Independents Anadarko Petroleum (NYSE: APC), Apache (NYSE: APA) and Devon Energy (NYSE: DVN) were all found in the red by the time the closing bell sounded. The Market Vectors Oil Services ETF (NYSE: OIH), the most heavily traded oil services ETF, slid 1.6% on strong volume. That move underscores how pensive investors were regarding equities today because oil services names are usually intimately correlated to crude’s gyrations.
OIH is starting to look technically vulnerable. If the ETF doesn’t find support at its 20-day moving average, it could easily fall another $2-$3. That said a move down to the high $30s makes OIH an appealing buy-on-the-dip candidate.
- AT&T And America Movil To Provide Deeper National Reach For Advanced Enterprise Services Across Latin America
- AT&T 4G LTE Available In Willimantic
- AT&T 4G LTE Available In Torrington
- AT&T And The University Of Kansas Team Up To Enhance Wireless Coverage On Lawrence Campus
- AT&T 4G LTE Available In Fargo
- AT&T 4G LTE Available In Amarillo
- Benefitfocus Announces Pricing of Initial Public Offering
- Trends of China Gear Industry 2013 Analysis & Reviewed in New Research Report at RnRMarketResearch.com
- Product Launch Formula 4.0 Bonuses Total $5000 at BrianHanson.com
- Datex Presents Motorola Solutions Webinar “Is It ‘Smart’ to Use Smartphones for the Enterprise?”