NEW YORK (Dow Jones)--Oil futures set a fresh high for 2009 Thursday, on the back of a string of better-than-expected economic indicators.
The latest figures, released Thursday, show that the U.S.'s gross domestic product contracted by 6.3% in the fourth quarter. This wasn't as sharp of a decline as some economists had expected.
U.S. existing home sales, new home sales and durable goods orders all posted better-than-expected headline figures this week, although the underlying fundamentals of the economy remain mixed. Traders have bid up oil prices in the belief that a turnaround in the economy, if it comes sooner than expected, would boost demand for crude oil and the useful products derived from it.
Light, sweet crude oil for May delivery settled $1.57, or 3%, higher at $54.34 a barrel on the New York Mercantile Exchange. This tops of the last 2009 high of $53.98 a barrel posted Tuesday.
May Brent crude on the ICE Futures exchange settled $1.71, or 3.3%, higher at $53.46 a barrel.
The string of economic data has also boosted equities, which, in turn, have reinforced the move upward in oil futures. The Dow Jones Industrial Average recently was up 96.6 points at 7,846.4.
While crude futures have fallen from the highs of over $145 a barrel set last summer, prices have stabilized in recent weeks and have held above $50 a barrel for six straight trading sessions.
Volumes were lighter Thursday, as traders took a breather from a heavy week of data. On Wednesday, the U.S. Energy Department reported that crude oil inventories rose by a larger-than-expected 3.3 million barrels to hit a 16-year high.
Some analysts say that continued tepid oil demand and robust supplies don't justify a $50-a-barrel price, but that interest and inflation fears will keep commodities buoyed. Worries about the ramifications of the U.S. government's stimulus measures have sent investors in search of hard assets that are likely to retain value in an inflationary environment.
"You're seeing a large overhang of supply with no commensurate pickup in demand, so the current price does not reflect the fundamentals," said Addison Armstrong, an analyst at Tradition Energy in Connecticut.
Fifty dollars is expected to hold as a floor in the near term.
"The longer we remain above $50 a barrel, the more difficult it will be to break that level on the way down," said Nauman Barakat, senior vice president with Macquarie Futures USA in New York.
Also supportive of crude oil prices was news that crude oil exports from the Organization of Petroleum Exporting Countries, excluding Angola and Ecuador, are forecast to decline to their lowest levels since June 2003 in the four-week period to April 11, according to tanker tracker Oil Movements.
The sharp decline in exports reflects OPEC's determination to trim supplies and counteract a sharp slowdown in consumption.
Front-month April reformulated gasoline blendstock, or RBOB, was 3.61 cents, or 2.4%, higher at $1.5311 a gallon. April heating oil was 1.08 cents, or 0.7%, higher at $1.4755 a gallon.
