U.S. crude oil futures surged above $86 as fresh technical buying on a wave of economic optimism helped to lift the energy commodity's price to new heights Monday.
Spurred by encouraging economic data on the domestic front, the price of light, sweet crude oil for May delivery rose for a fifth consecutive session on the NYMEX, settling to $86.62 a barrel, the highest level in 18 months.
Additionally, NYMEX gasoline futures gained on the session to $2.35 a gallon, while natural gas spot prices at the Henry Hub also burned brighter on the commodity exchange at $4.28 Mcf. Today, crude rose alongside equities on positive economic data spotlighting an increase in pending home sales. Both markets also bounced on news that the U.S. services sector grew at its fastest pace in nearly four years during the month of March, an ISM report showed.
Oil Price at Full Throttle
Oil prices have gained by more than 8% during the span of a five day rally. "The market's starting to trend pretty nicely for oil," noted Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. However, given the ample supplies still underlying the crude oil market, this year's record price above $86 is arguably a bit on the high side, according to McGillian. "We really haven't seen any kind of significant increase in fuel demand levels," he underscored.
The analyst continued, "The price keeps pushing up for the same fundamental reasons, and everyone's waiting and watching to see how high it will go before the price has to turn back to a more realistic level." "But right now," McGillian added, "it looks as if the bulls are in charge and not fighting much resistance yet."
Reporter Nancy Agin writes for Rigzone.Com
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