Crude Oil Trades Near Two Week High on Optimism Fuel Demand to Increase

Crude oil futures were little changed as U.S. stocks rebounded from an early decline and the dollar fluctuated against the euro. Oil rose 72 cents in the last hour of trading to erase a loss as the Standard & Poor’s 500 Index rebounded. The greenback was steady against the euro on renewed signs of debt problems at banks in the 16 nation region. “The equity market is back up unchanged, that brings crude unchanged,” said Richard Ilczyszyn, a market strategist at Lind-Waldock, a broker in Chicago. “Crude oil is very susceptible to currencies and equities right now.”

Crude for November delivery rose 3 cents to settle at $76.52 a barrel on the New York Mercantile Exchange. The price ranged from $75.52 to $77.17, the highest level since Sept. 14. “After a brief period over the past few weeks where the oil market appeared to disconnect from equities, the linkage appears to be alive and well again,” analysts including Lawrence Eagles at JPMorgan Chase & Co. said in a report today. The Reuters/Jefferies CRB Index of 19 commodities rose 0.2 percent to 284.08 at 2:30 p.m. in New York. The dollar gained 0.1 percent against the euro to $1.3474. November crude rose 2.1 percent last week as the dollar weakened after the Federal Reserve said it may take more steps to ease monetary policy.

The Standard and Poor’s index rose 0.1 percent at 2:30 p.m. before falling 0.6 percent to 1,142.16 at 4:28 p.m. Brent crude oil for November delivery fell 30 cents, or 0.4 percent, to settle at $78.57 a barrel on the London based ICE Futures Europe exchange. ‘Hard to Get Bullish’ “The dollar and the stock market are the two drivers,” said.....Read the entire article.


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Oil Rises First Time in Five Days as Europe Leaders Agree on Fund Package

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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