Crude oil surged more than 4.5 percent in New York, its biggest jump in seven months, on speculation an emergency fund by European policy makers will contain sovereign debt risks and maintain economic growth. Oil climbed from a 12 week low on May 7 after the European Union and the International Monetary Fund agreed to a lending mechanism of about 720 billion euros ($928 billion). Prices may return to $80 to $85 a barrel once the debt crisis is resolved, Algerian Energy Minister Chakib Khelil said today.
“Europe has clearly swung the pendulum back to optimism,” said Michael Fitzpatrick, vice president of energy at MF Global in New York. Crude oil for June delivery rose $1.64, or 2.2 percent, to $76.75 a barrel at 9:03 a.m. on the New York Mercantile Exchange. Futures rose as much as $3.40 to $78.51, the biggest gain since Sept. 30. Crude has increased 31 percent in the past year.
U.S. stock index futures rallied, with the contract on the Standard & Poor’s 500 Index touching its daily limit. June contracts on the S&P 500 Index increased 4.1 percent to 1,152.10 at 9:05 a.m. in New York after earlier reaching the limit of 1,162. The euro is heading for its biggest two day gain in more than a year, rising to $1.2913 from $1.2755 May 7 and restoring the appeal of dollar price assets as an alternative investment.
Reporter Margot Habiby can be reached at mhabiby@bloomberg.net.
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