Crude Oil Rises in New York After U.S. Economy Grows More Than Expected

Crude oil rose for the first time in four days after a government report showed that the U.S. economy expanded at the fastest pace in six years, signaling demand may rise in the world’s biggest energy market. Oil climbed as much as 1.6 percent after the Commerce Department said U.S. gross domestic product grew by 5.7 percent in the fourth quarter, exceeding the median forecast of economists surveyed by Bloomberg News. It was the best performance since the third quarter of 2003. Oil has lost 6.9 percent in January, the first monthly decline since July.

“It’s a good GDP number, and frankly that’s what the market needed to see,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “If there are any doubters out there that the economy is not in recovery, this should quash that.” Crude oil for March delivery increased 71 cents, or 1 percent, to $74.35 a barrel at 10:10 a.m. on the New York Mercantile Exchange. Earlier, it touched $74.82.

Oil has fallen 12 percent since reaching a 15-month high of $83.95 a barrel on Jan. 11 amid concern the U.S. government will limit trading by banks and that China will take further steps to cool its economy. China is the fastest-growing energy market.
“We might have gotten more of a bounce off this GDP number if the Chinese weren’t raising the reserve requirements for the banks and slowing lending,” said Phil Flynn, vice president of research at PFGBest in Chicago.....Read the entire article.

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Crude Hovers Near $70 Despite Surprise Drawdown

Despite a surprise drawdown in domestic crude stocks reported today, U.S. crude oil futures fell once more on the New York Mercantile Exchange Wednesday, pressured by oil traders' increasingly bearish outlook regarding the market's underlying fundamentals, as well as concerns about the global economy's recovery. Recording a negative movement on the NYMEX for the sixth consecutive session, the price of light, sweet crude oil closed nearly $2 less than its previous settlement to $70.67 a barrel. Additionally, natural gas spot prices at the Henry Hub reversed to just under the $5-threshold to settle at $4.898 per thousand cubic feet.

"We have broken out to the downside of this $75-$80 range in the crude oil market that had been holding since the middle of October," noted Bill O'Grady, the chief markets strategist at St.Louis based Confluence Investment Management LLC. "We fell out of it yesterday and accelerated today on government data that wasn't really all that bearish, you had a bullish crude number, but the product numbers were not very strong." Interestingly, the dollar's three day advance collapsed against the euro on Wednesday, which did little to prop up energy prices. Typically, a weaker greenback loses its safe haven appeal, spurring traders toward cheaper dollar denominated commodities.....Read the entire article.


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Crude Oil Climbs Above $80 a Barrel in New York as U.S. Equities Rebound

Crude oil fluctuated as Tropical Depression Ida weakened and the dollar gained against the currencies of major U.S. trading partners. Ida’s sustained winds have dropped to 35 miles (56 kilometers) per hour from 45 mph earlier, the National Hurricane Center said on its Web site. Producers have begun preparations to resume operations. A stronger dollar reduces the appeal of commodities to investors looking for an inflation hedge.

“I doubt there was any severe damage caused by Ida,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “There will probably be some impact on next week’s inventory data, but that’s it.” Crude oil for December delivery fell 32 cents, or 0.4 percent, to $79.11 a barrel at 11:36 a.m. on the New York Mercantile Exchange. Futures dropped as much as 88 cents and climbed as much as $1.08 today. Prices have increased 77 percent this year.....Read the entire article.

Crude Oil Climbs the Most in a Month After U.S. Economy Expands

Crude oil rose the most in a month after the U.S. economy grew in the third quarter for the first time in more than a year, spurring optimism that fuel demand will increase. Oil climbed as much as 3.9 percent after the Commerce Department said that the world’s largest energy consuming country expanded at a 3.5 percent annual pace from July through September. The economy was forecast to strengthen at a 3.2 percent annual pace, according to a Bloomberg News survey.

“This confirms that the recession has ended and now the only question is what the pace of the recovery will be,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “It would appear that this would lead to increased demand.” Crude oil for December delivery rose $2.71, or 3.5 percent, to $80.17 a barrel at 1:21 p.m. on the New York Mercantile Exchange. Futures are up 80 percent this year after climbing to a one year high of $82 a barrel on Oct. 21. Prices are heading for the biggest gain since Sept. 30.....Read the entire article.

Survey Shows, Oil May Rise on Slumped Earnings

Crude oil may rise as better than expected second quarter earnings bolster the outlook for a recovery in demand, a survey of analysts showed. Seventeen of 37 analysts surveyed by Bloomberg News, or 46 percent, said futures will climb through July 24. Ten respondents, or 27 percent, forecast that prices will be little changed, and 10 expected a decline. Last week, 46 percent of analysts said oil would fall. Futures will increase as second quarter earnings beat analyst expectations, said Bill O’Grady, the chief market strategist for Confluence Investment Management in St. Louis. Prices may also increase as equity markets rise.....Complete Story

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