Crude Oil Ends Higher As OPEC Raises Demand Growth Outlook

(RTTNews) - U.S. crude oil extended gains to settle higher for a third straight session Monday, after the Organization of the Petroleum Exporting Countries raised its demand growth forecast for the year, even as supply glut worries eased with U.S. rig counts continuing to drop.

The jump in oil prices came despite some disappointing Chinese trade data, with imports plunging at the fastest rate in more than five years and exports unexpectedly declining.

The Organization of the Petroleum Exporting Countries or OPEC revised its crude oil outlook for 2015 on higher demand than previously estimated. The group has forecast demand for its crude oil to average 29.21 million barrels per day in 2015, an increase of 0.43 million barrels per day than previously forecast.

The cartel also lowered its outlook for crude supply growth in non-OPEC countries, due to a reduction in U.S. shale production with many producers resorting capital investment cuts.

Meanwhile, data from U.S. oil services firm Baker Hughes showed the number of U.S. rigs for oil exploration including developing oil or natural gas dropped to a near 5-year low at 1,456 end last week. The rig count was 1,444 end March, 2010.

The international rig count for January 2015 was 1,258, down 55 from the 1,313 counted in December 2014, and down 67 from the 1,325 counted in January 2014. The international offshore rig count for January 2015 was 314, down 24 from the 338 counted in December 2014, and up 12 from the 302 counted in January 2014.

Crude oil for March was up $1 at $52.87 a barrel this morning, having clawed higher for the past two weeks amid signs that non-OPEC production will be tailing off.

Light Sweet Crude Oil futures for March delivery, the most actively traded contract, gained $1.17 or 2.3 percent to settle at $52.86 a barrel on the New York Mercantile Exchange Monday.

Crude prices for March delivery scaled a high of $53.99 a barrel intraday and a low of $51.65.

On Thursday, crude oil surged to end at $51.69 a barrel, up $1.21 or 2.4 percent, after some better-than-expected U.S. jobs report strengthened the case for a U.S. interest rate hike by mid-year, despite the dollar spiking significantly. For the week, oil prices gained 7.2 percent.

The upcoming week's economic calendar is fairly light, although a few market moving numbers are expected. Some of the significant releases include the U.S. Commerce Department's retail sales report for January and the University of Michigan's consumer sentiment index for February.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 94.51 on Monday, down from its previous close of 94.69 late Friday in North American trade. The dollar scaled a high of 94.88 intraday and a low of 94.39.

The euro trended higher against the dollar at $1.1331 on Monday, as compared to its previous close of $1.1315 late Friday in North American trade. The euro scaled a high of $1.1361 intraday and a low of $1.1271.

On the economic front, China's trade surplus rose to a record high in January as imports plunged at the fastest rate in more than five years and export unexpectedly declined, data from the customs office showed Sunday. The trade surplus came in at $60 billion in January, more than the $48.20 billion expected by economists. In December, the surplus was at $49.61 billion. The surplus for January beat the previous record of a $54.4 billion surplus recorded in November.

Germany's trade surplus, exports and imports reached record highs in 2014, provisional data from Destatis revealed Monday. Exports increased 3.7 percent to EUR 1,133.6 billion in 2014 and imports climbed 2 percent to EUR 916.5 billion. In 2014, export and import levels were higher than the previous all-time highs recorded in 2012.

The German foreign trade balance showed a surplus of EUR 217.0 billion in 2014, which was the highest value ever recorded. A year ago, the surplus totaled EUR 195 billion.

Eurozone investor sentiment rose sharply to its highest since May 2014 on the back of the quantitative easing announced by the European Central Bank, data from the think tank Sentix showed Monday. The investor confidence index for February rose to 12.4 from 0.9 in January. This was the highest score since May 2014 and far exceeded an expected score of 3.

The Organization for Economic Cooperation and Development's (OECD) leading index signaled a stable growth momentum in the region and a positive change in growth momentum in the euro area.

The OECD composite leading indicator rose to 100.5 in December from 100.4 in November, indicating stable growth momentum in the United States, Canada, Japan, China and Brazil. While the U.K. index pointed to an easing in growth momentum, the euro area showed signs of positive growth momentum, particularly in Germany and Spain.

The indicator for India suggested firming growth, while in Russia the index continues to point to a loss in growth momentum.

Confidence among Japanese consumers improved for the second straight month in January, albeit less than expected, data from the Cabinet Office showed Monday. The consumer confidence index rose by 0.3 points to 39.1 in January from 38.8 in the previous month. Economists had forecast a 39.3 score for the month.