Tuesday, September 27, 2011

Bloomberg: Crude Oil Gains on Optimism Europe Will Tame Debt Crisis, Boosting Fuel Demand

Crude Oil rose for a second day in New York on speculation European governments will contain their sovereign debt crisis, limiting its impact on the global economy and demand for raw materials.

Futures gained as much as 3.6 percent, trimming the biggest quarterly decline since the global financial crisis in 2008. U.S. Treasury Secretary Timothy F. Geithner predicted Europe will intensify efforts to contain its debt problems after being pressured at international meetings in Washington last week. European stocks climbed for a third day.

“It’s a ‘risk on’ day for oil,” said Thorbjorn Bak Jensen, an analyst at Global Risk Management in Middelfart, Denmark, who predicts Brent will average $107 in the fourth quarter. “Investors are hoping the European Central Bank will pull a rabbit out of the hat, in the form of an increase in the strength of the bond buying program.”

Crude for November delivery climbed as much as $2.90 to $83.14 a barrel in electronic trading on the New York Mercantile Exchange. It was at $82.62 at 1:44 p.m. London time. Oil has dropped 13 percent since the end of June, the biggest quarterly loss since the three months ended December 2008. Prices are down 7 percent this month and 9.6 percent this year......Read the entire Bloomberg article.

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