Crude Little Changed After US 4Q GDP Data
Oil futures fluctuated around $100 a barrel Friday after the U.S. government said the economy grew 2.8% in the fourth quarter.
The figure was smaller than expected, dashing hopes for a bigger expansion in the world's biggest oil consumer. But it represented the fastest rate of growth in more than a year and a half, signaling that the recovery is gaining steam.
Light, sweet crude for March delivery recently traded up 8 cents, or 0.1%, to $99.78 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe rose 57 cents, or 0.5%, to $111.36 a barrel.
Economists surveyed by Dow Jones Newswires expected 3% growth during the last three months of the year. Crude prices pulled back slightly after the figure was released.
"It wasn't as strong as expected," said Phil Flynn, analyst at PFG Best in Chicago.
Still, the growth marked a pick-up from an otherwise sluggish year, during which the economy grew by 1.7%, slower than the 3% growth in 2010.
The figure offers some hope that the U.S. economy is steadily improving. The slow pace of growth in the U.S. over the last several years, coupled with high unemployment, has clobbered demand for oil and refined fuels, keeping prices restrained.
However, the brisk pace of growth in emerging markets, especially China, the No. 2 oil consumer, has helped keep prices from falling too far.
Meanwhile, market participants are expected to continue eyeing developments between Iran and the West. Iran's parliament is set to debate on Sunday an immediate halt of oil exports to the European Union, which would halt an estimated 600,000 barrels a day of crude exports to the region.
The supply threat, if carried out, would effectively pre-empt the EU's decision earlier this week to ban Iranian imports, but not until July 1. The long lead time was meant to give major importers like Greece and Italy time to find additional sources of supplies.
"Should Iran in turn ban exports themselves and with immediate effect, the dynamics would be more interesting and supportive for oil prices," said analysts at Barclays Capital.
The EU set the embargo to raise pressure on Iran over its nuclear program. The U.S. and its European allies believe that the program is aimed at developing nuclear weapons, a charge Tehran denies.
Despite the threat from Iran, the International Energy Agency watchdog on Thursday signaled that it could tap emergency supplies in the event of a sudden disruption to Iranian supplies.
Front-month February reformulated gasoline blendstock, or RBOB, recently traded up 3.03 cents, or 1.1%, to $2.8769 a gallon. February heating oil gained 1.75 cents, or 0.6%, to $3.0710 a gallon.
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