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Crude futures climb ahead of API and EIA US inventories reports on positive data

Crude firmed today ahead this week’s key inventories reports on positive economic data that came out in the US, Europe, Japan and Australia to boost the demand outlook for oil.

A key US manufacturing update from the ISM (Institute of Supply Management) showed a seventh consecutive month of expansion, though at a slower pace than in January as the ISM’s index declined from 58.4 to 56.5 for February. Personal income and spending also increased with income growing 0.1% in January, while spending rose 0.5% and saving rates was lower at 3.3% compared to 4.2% for the previous month.

Australia added to the sentiment today after its central bank raised a key interest to 4% to reflect an improvement in the economic outlook. Meanwhile, the unemployment rate in the euro zone remained at 9.9% and Japan’s jobless rate surprisingly declined to 4.9%.

Further direction for crude will be set by inventories data for the week to 26 February from the American Petroleum Institute (NYSEMKT:API), which is set to be released later today, while a more closely watched stockpiles report from US Energy Information Administration (NYSEMKT:EIA) is due out tomorrow.

April Brent Crude rose to US$77.62/barrel, while US light, sweet crude reached US$79.40/barrel on the New York Mercantile Exchange (NYMEX).

Major oil and gas producers posted small gains today. Tullow Oil (LSE: TLW) added less than 1%, as did BP (LSE: BP), while fellow supermajor Shell (LSE: RDSB) gained nearly 1%, as did another FTSE 100 constituent Cairn Energy (LSE: CNE). BG Group (LSE: BG) outperformed its peers, climbing 1.2%.

Petrofac (LSE: PFC) gained 1%, while fellow oil and gas engineering firm Amec (LSE: AMEC) was flat.

Midcaps were mixed. Dana Petroleum (LSE: DNX) was in the lead with a 1.8% climb. Dragon Oil (LSE: DGO) and JKX Oil & Gas (LSE: JKX) followed with gains of nearly 1%. Heritage Oil (LSE: HOIL) rose marginally, while Salamander Energy (LSE: SMDR) and Soco International (LSE: SIA) were flat.

Premier Oil (LSE: PMO) posted an insignificant loss, while Melrose Resources (LSE: MRS) dropped 1.4%.

Services companies Wood Group (LSE: WG) and Wellstreeam Holdings (LSE: WSM) did well, advancing 1.3%.

Small caps showed little movement today with the exception of EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG), which rallied 8%.

Disclosure: The author holds no positions in the company