Oil higher on US housing data

Agence France-Presse

Posted at Jul 20 2011 11:18 AM | Updated as of Jul 20 2011 07:18 PM

SINGAPORE - Oil was higher in Asian trade Wednesday as investors drew hope from better-than-expected housing data in the United States, the world's biggest crude user, analysts said.

New York's main contract, light sweet crude for August delivery advanced 80 cents to $98.30 a barrel and Brent North Sea crude for September delivery was 69 cents higher at $117.75.

"We have seen that investor confidence was boosted from the US housing data," Ker Chung Yang, an analyst with Phillip Futures, told AFP.

Data released Tuesday by the Commerce Department showed US housing starts jumped 14.6$% from May to an annual rate of 629,000 units.

That was much better than expected by analysts who had predicted an average 570,000 starts for last month.

It was the second straight month of increases, and the department sharply hiked its May number to 609,000 units, from an initial 560,000 estimate.

Construction has been under siege since the collapse of the housing bubble in 2006 and the 2008-2009 recession.

Meanwhile, traders were closely watching Thursday's emergency summit of eurozone leaders as they seek ways to prevent a default by Greece that could potentially have destabilising effects on larger European economies.

Oil traders have been closely watching the situation in Europe out of fear that a Greek default would trigger financial upheaval and an economic slowdown across the continent, cutting into global energy demand.