West Texas Intermediate (WTI) light sweet crude oil for October delivery was up 7 cents to $88.97 a barrel, but has traded as high as $89.49 and as low as $87.67 in the intraday.
Brent crude oil for October delivery was climbing 42 cents to $114.44 a barrel as the global benchmark received support from not only the positive economic news, but also views that it will be a while before prewar levels of crude oil production in Libya resume -- keeping supplies tight. "By now most Libya optimists have come to their senses and the tight balance in the crude oil market going forward comes back in focus as soon as U.S. growth optimism grips the market," said SEB Commodity Research strategist Filip Petersson. While the new chairman of Libya's state-owned oil company expects oil production to resume within weeks as the civil war comes to an end, he estimates that it will take about 15 months for production levels to return to 1.6 million barrels a day. The U.S.-pegged WTI was swinging between positive and negative territory on promising U.S. economic news and the build in domestic crude inventories. The Department of Energy on Wednesday reported a 5.3 million barrel injection in crude oil inventories for the week ended Aug. 26. Before that, the American Petroleum Institute revealed a big stock increase of 5.1 million barrels. Still, both bodies reported a decline in gasoline supplies, with the Department of Energy reporting a drawdown of 2.8 million barrels and the API reporting a decline of 3.1 million. This, after the latest MasterCard SpendingPulse report said that U.S. gasoline demand increased by 1.3% last week mainly due to the spike in pumping along the east coast as people evacuated coastal areas ahead of the Hurricane Irene. The macroeconomic indicator is based on aggregate sales and services activity in the MasterCard payments network. Unleaded gasoline for October delivery was rising two cents to $2.8646 a gallon following the reports of declines in gasoline supplies. "But unleaded gasoline futures have resistance overhead and are getting overbought. There may be some more on the upside, but it is starting to look limited to me," cautioned Cameron Hanover founder Peter Beutel. Earlier today, the Commerce Department said factory orders saw improvements in July. New orders increased 2.4%, a rebound from June's revised 0.4% decrease. The latest update was better than the 1.8% increase economists had anticipated.