U.S. crude oil rebounded to end sharply higher on Tuesday, after a final reading showed the U.S. economy to have grown more than expected in the third quarter, notwithstanding a strong dollar.
In some positive economic news, a Commerce Department report showed U.S. gross domestic product to have increased much more than previously estimated in the third quarter, reflecting notably stronger consumer spending growth.
Meanwhile, U.S. personal income rose less than expected in November, but personal spending increased more than expected, a Commerce Department report showed Tuesday.
Nevertheless, investors continued to be wary of a supply glut and tepid demand growth, while awaiting the weekly oil status reports. Oil continued to remain under pressure after Saudi oil minister Ali Al-Naimi at an energy conference in Abu Dhabi last weekend, opposed any cut in output.
Meanwhile, oil futures responded positively to comments from some Arab members of the Organization of the Petroleum Exporting Countries that oil prices would rebound to $70 to $80 a barrel next year.
While the American Petroleum Institute is set to release its crude inventories data for the week ended December 19 later today, the U.S. Energy Information Administration will release its oil supply data on Wednesday.
In some soft economic data from the U.S., the Labor Department on Tuesday said new orders for U.S. manufactured durable goods unexpectedly decreased in November, while another report from the Commerce Department showed sales of new single-family houses in the U.S. to have unexpectedly declined in November.
Light Sweet Crude Oil futures for February delivery, the most actively traded contract, jumped $1.86 or 3.4 percent to close at $57.12 a barrel on the New York Mercantile Exchange Tuesday.
Crude prices for February delivery scaled a high of $57.26 a barrel intraday and a low of $55.06.
On Monday, crude oil futures plunged to end at $55.26 a barrel, down $1.87 or 3.3 percent, on concerns over excess supply and demand growth worries. Some profit taking after last Friday's sharp increase also contributed to oil's decline.
Saudi Oil Minister Ali Al-Naimi said the OPEC will not reduce production even if non-OPEC producers decide to cut output. He even hinted that his country may increase production if any new buyers come into the picture.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 90.10 on Tuesday, up from its previous close of 89.78 late Monday in North American trade. The dollar scaled a high of 90.16 intraday and a low of 89.63.
The euro trended lower against the dollar at $1.2173 on Tuesday, as compared to its previous close of $1.2232 late Monday in North American trade. The euro scaled a high of $1.2247 intraday and a low of $1.2165.
In economic news from the U.S., a Commerce Department report said a final reading on third quarter U.S. GDP showed the economy to have grown 5.0 percent compared to the previously estimated 3.9 percent growth. Economists expected the pace of GDP growth to be upwardly revised to 4.3 percent.
A report from the Labor Department showed new orders for U.S. manufactured durable goods in November dropped 0.7 percent, against an increase of 0.3 percent in the preceding month. Economists expected orders to surge up by 0.3 percent. Excluding orders of transportation equipment, durable goods orders fell by 0.4 percent in November, after edging down by 0.1 percent in October.
A report from Thomson Reuters and the University of Michigan said the consumer sentiment index for December was downwardly revised to 93.6 from the mid-month reading of 93.8. Economists had expected the index to be downwardly revised to 93.0.
Sales of new single-family houses in the U.S. unexpectedly tumbled 1.6 percent in November to a seasonally adjusted annual rate of 438,000 from the revised October rate of 445,000. Economists expected new home sales to inch up to an annual rate of 460,000 in November from the 458,000 originally reported for the previous month.
Personal income in the U.S. increased 0.4 percent in November following an upwardly revised 0.3 percent increase in October. Economists expected personal income to climb by 0.5 percent compared to the 0.2 percent growth originally reported for the previous month.
Personal spending in the U.S. climbed 0.6 percent in November against economists' expectation of a 0.5 percent increase.
Meanwhile, the International Monetary Fund economists expect global GDP to grow by 0.3 to 0.7 percent in 2015, thanks to lower oil prices.
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