crude oil rises to multi-month high

Crude Oil Rises To Multi-Month High
3/17/2009 3:47 PM ET

(RTTNews) - Crude oil soared to its highest finish in more than 3 1/2 months on Tuesday as some positive housing data provided some encouragement for energy demand. The April contract expired following Tuesday's session.

Light sweet crude oil for April delivery finished at $49.16, up $1.81, at the highest close since Dec. 1 for a front-month contract. Prices reached as high as $49.82 earlier in the day.

May oil, which takes over as the front-month contract, added $1.99 to finish the session at $50.04 per barrel. This was the contract's highest finish since Jan. 15.

Traders looked ahead to the Energy Information Administration's inventory report on Wednesday. Last week, the EIA said crude oil inventories increased 749,000 barrels in the week ended March 6. This is a little higher than the expectations of economists, who were looking for a build of about 300,000 barrels.

On the economic front, the U.S. Labor Department revealed Tuesday that producer prices rose by 0.1 percent for February. This followed a rise of 0.8 percent in the previous month.

Economists had expected producer prices to rise by 0.4 percent.

Meanwhile, the Commerce Department reported that housing starts rose 22 percent to an annual rate of 583,000 in February from a revised January estimate of 477,000.

Economists had expected starts to fall to 450,000 from the 466,000 originally reported for the previous month.

Oil prices turned higher on Monday as confidence in an economic turnaround out-weighed the Organization of Petroleum Exporting Countries' decision to leave output unchanged.

Light sweet crude for April delivery finished at $47.35 per barrel, up $1.10 for the day. Prices touched as high as $47.63 after earlier touching as low as $43.63.

OPEC decided Sunday to not reduce oil production below current levels, instead deciding to focus their efforts on getting member countries to abide by their current output quotas. The cartel's 152nd meeting was held in Vienna.

At the pump, gasoline prices remained steady at $1.91 per regular unleaded gallon, according to AAA's daily fuel gauge. This is lower than the month-ago mark of $1.966 and well off the year-ago mark of $3.283.

by RTT Staff Writer

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