Crude Ticks Up Amid Weak Dollar

London (Dec 16)  The price of crude oil was moving higher Monday morning, with the US dollar trading weak versus a basket of currencies. Also, upbeat euro zone manufacturing data helped lift trader sentiment.

Light Sweet Crude Oil (WTI) futures for January delivery, edged up $0.54 to $97.14 a barrel. Last week, oil shed just over 1 percent after the official Energy Information Administration's weekly report showed a significant, more-than-expected jump in U.S. gasoline stockpile last week, notwithstanding a massive drop in crude oil inventories. Traders overlooked the International Energy Agency's monthly report, which moved up global oil demand forecast for the year 2013 and 2014 by 1.2 million barrels per day (mbd) each on stronger-than-expected third quarter 2013 OECD demand growth.

This morning the U.S. dollar was slipping back near a two-month low versus the euro and trading flat against sterling and the yen. The buck moved down near a 2-year low versus the Swiss franc.

In economic news from the euro zone, Germany' manufacturing purchasing managers' index increased in December to the highest level in thirty months, indicating a significantly faster growth in activity, data from a survey by Markit Economics and BME revealed. The seasonally adjusted manufacturing purchasing managers' index climbed to 54.2 in December from 52.7 in November. Economists were looking for a reading of 52.9.

Meanwhile, activity in the euro zone private sector increased at a faster pace in December, and to a larger extent than expected by economists, data from a recent survey revealed. The seasonally adjusted composite output index, which gauges the performance of the manufacturing sector and the service sector, advanced to 52.1 December from 51.7 in November, a survey conducted by Markit Economics showed. Economists were looking for a reading of 51.9.

A report from the Eurostat revealed trade surplus in the euro zone rose to EUR 17.2 billion in October from EUR 9.6 billion in October last year. In September, the surplus amounted to EUR 10.9 billion.

From the U.S., the New York Federal Reserve will release the results of its manufacturing survey for December at 8:30 a.m. ET. Economists expect the manufacturing index to come in at 4.50 compared to -2.21 in November. 

Simultaneously, the Labor Department will release its final estimates for third quarter productivity and costs also at 8:30 am ET. The consensus estimates call for a 2.9 percent quarter-over-quarter increase in non-farm productivity, while unit labor costs may have slipped 1.4 percent.

During this week focus will be on the results of manufacturing surveys by the Philadelphia Federal Reserve, the Federal Reserve's industrial production report for November, the National Association of Home Builders' housing market index for December, the Commerce Department's housing starts data for November, the weekly jobless claims data and the National Association of Realtors' existing home sales data for November.

The 2-day FOMC meeting due to end on Wednesday and the ensuing Chairman's press conference, will be in focus.

Also, focus will be on the crude oil inventories data from the API, due out Wednesday after the market hours, and the EIA due out the subsequent day.