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Crude climbs on improving economic reports
Source: Agencies |
February 3, 2010, Wednesday
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OIL surged ahead for the second straight day yesterday as prices that were sliding lower for two weeks abruptly switched direction on economic reports that suggest demand for crude could improve.
The jump in the past two days is the latest swing on the price seesaw over the past two months or so. Prices jumped about 20 percent from mid-December to a 15-month high last month only to slide more than 10 percent through the end of the month.
Benchmark crude for March delivery rose US$2.02 to US$76.45 a barrel on the New York Mercantile Exchange. The contract rose US$1.54 to settle at US$74.43 on Monday.
"I tell my clients, 'Don't get too comfortable on either side of this market,'" said Jim Ritterbusch of Ritterbusch and Associates.
He said many of the factors behind this two-day rally were the same reasons why oil jumped to nearly US$84 a barrel last month: an improving stock market, a strong manufacturing report on Monday that suggests improving demand for oil, cold weather expected through mid-February that should push up heating oil consumption, and China importing large amounts of oil.
The stock market rose yesterday after the National Association of Realtors' index of sale contracts rose 1 percent in December, as buyers scrambled to take advantage of a first-time homebuyer tax credit before it was set to expire last November.
"It doesn't take much to flip sentiment," Ritterbusch said.
Still, indicators that oil demand will improve have not panned out so far. Demand has continued to run well below the weak levels of a year ago.
Retail gasoline prices fell for the 20th straight day yesterday as the slide in oil at the end of January continues to work its way to gas pumps.
Prices fell 0.8 cents to a national average of US$2.661 per gallon, according to AAA, Wright Express and Oil Price Information Services. Prices are down 3.9 cents for the past week and flat with a month ago. Prices are 88.1 cents higher than a year.
In other Nymex trading in March contracts, heating oil rose 5.68 cents to US$2.0117 a gallon, and gasoline added 6.41 cents at US$1.9967 a gallon. Natural gas rose 6.4 cents to US$5.498 per 1,000 cubic feet.
In London, Brent crude was up US$2.11 at US$75.22 on the ICE futures exchange.
The jump in the past two days is the latest swing on the price seesaw over the past two months or so. Prices jumped about 20 percent from mid-December to a 15-month high last month only to slide more than 10 percent through the end of the month.
Benchmark crude for March delivery rose US$2.02 to US$76.45 a barrel on the New York Mercantile Exchange. The contract rose US$1.54 to settle at US$74.43 on Monday.
"I tell my clients, 'Don't get too comfortable on either side of this market,'" said Jim Ritterbusch of Ritterbusch and Associates.
He said many of the factors behind this two-day rally were the same reasons why oil jumped to nearly US$84 a barrel last month: an improving stock market, a strong manufacturing report on Monday that suggests improving demand for oil, cold weather expected through mid-February that should push up heating oil consumption, and China importing large amounts of oil.
The stock market rose yesterday after the National Association of Realtors' index of sale contracts rose 1 percent in December, as buyers scrambled to take advantage of a first-time homebuyer tax credit before it was set to expire last November.
"It doesn't take much to flip sentiment," Ritterbusch said.
Still, indicators that oil demand will improve have not panned out so far. Demand has continued to run well below the weak levels of a year ago.
Retail gasoline prices fell for the 20th straight day yesterday as the slide in oil at the end of January continues to work its way to gas pumps.
Prices fell 0.8 cents to a national average of US$2.661 per gallon, according to AAA, Wright Express and Oil Price Information Services. Prices are down 3.9 cents for the past week and flat with a month ago. Prices are 88.1 cents higher than a year.
In other Nymex trading in March contracts, heating oil rose 5.68 cents to US$2.0117 a gallon, and gasoline added 6.41 cents at US$1.9967 a gallon. Natural gas rose 6.4 cents to US$5.498 per 1,000 cubic feet.
In London, Brent crude was up US$2.11 at US$75.22 on the ICE futures exchange.
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