Oil prices moved with high volatility but ended with little change yesterday as investors were torn between anticipation of a Greek debt deal and disappointing US data. WTI crude oil prices for March delivery soared to as high as 101.29 earlier in the day before slipping to 98.48 at close while the equivalent Brent crude contract jumped to a 3-week high of 113.9 before ending the day at 110.98. Gold climbed higher despite a stronger US dollar. Weakness in US economic data and the uncertain outlook in the Eurozone fueled safe-haven demand.

The EU summit, despite the modest progress, helped ease market worries in the near-term as 25 of 27 countries agreed the draft fiscal compact which was, however, described by the Czech PM as 'really very weak'. There have also been increasing speculations that the Greek PSI agreement will be done soon. Meanwhile, a FT report unveiled that many huge banks in the 17-nation region are preparing to tap the ECB's 3-year LTRO with an amount doubling or tripling that supplied in the December auction.

On the other side of the Atlantic, encouraging US economic data that had been thriving market sentiment and driving the greenback higher appeared to have lost momentum. The dataflow released yesterday was somehow disappointing. S&P/Case-Shiller Composite Housing Index unexpectedly dropped -3.7% y/y in November. The decline was more severe than October's -3.4% and market expectation of -3.7%. Chicago PMI index unexpectedly fell -2 points to 60.2 in January from 62.2 a month ago. The market had anticipated a rise to 63. Consumer confidence index slipped to 61.1 in January from 64.5. This was compared with consensus of 68. Weaker-than-expected economic data for January probably signaled that economic growth in the first quarter might be disappointing.

A number of important data will under the spotlight today. The US ISM manufacturing index probably rose +0.6 points to 54.5 in January while the ADP employment data might show that the number of payrolls increased +185K in January, decreasing sharply from the 325K addition a month ago. Construction spending probably gained +0.6% in December, an ease from +1.2% in the prior month.

Ahead of the inventory report from the DOE/EIA, the industry-sponsored API estimated that crude inventory rose +2.1 mmb in the week ended January 27. Concerning fuel products, gasoline inventory fell -0.46 mmb while distillate stock gained +0.97 mmb.