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Oil above US$78 after economic reports
Source: Agencies |
November 3, 2009, Tuesday
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OIL prices rose yesterday, backed by the weaker dollar and strong economic data in the U.S. and China, which raised hopes for an increase in energy demand.
Benchmark crude for December delivery rose US$1.13 to settle at US$78.13 a barrel on the New York Mercantile Exchange after shedding US$2.87 on Friday to settle at US$77.
The Institute for Supply Management, a trade group of purchasing executives, said yesterday that U.S. manufacturing activity grew in October at the fastest pace in more than three years, helped by government spending and higher demand from overseas.
The strong report raised hopes that energy demand, which has been hampered by the recession, may be rebounding. Yet the dollar keeps falling, which has helped push oil prices higher as well.
Dollar-based oil can look like a bargain for investors holding stronger currencies.
Also yesterday, the Commerce Department reported that September construction spending posted a better-than-expected performance, powered by the largest jump in housing construction in more than six years.
And the National Association of Realtors said that the volume of signed contracts to buy previously occupied homes rose for the eighth straight month in September as buyers scrambled to take advantage of a tax credit for first-time owners that expires at the end of this month.
Oil also received a boost from a weakened dollar and strong economic data out of China, which could be a stimulus for greater oil demand.
Danske Bank said the data suggested that "the Chinese recovery remains strong and might even be gaining further strength following a slowdown during (the third quarter)."
Oil has slumped from its 2009 high of US$82 a barrel last month as the dollar reversed some of its earlier losses, but on yesterday the euro gained again on the U.S currency, rising to US$1.4753 from US$1.4730.
Investors will be paying attention to more third quarter U.S. corporate earnings results this week.
Ford Motor Co. surprised the market yesterday by reporting net income of US$1 billion in the third quarter and forecast a "solidly profitable" 2011. Ford lost more than US$14.6 billion in 2008 and hasn't posted a full-year profit since 2005.
Cisco Systems Inc., Kraft Foods Inc., Marathon Oil Corp., Starbucks Corp. and Time Warner Inc. are also scheduled to report earnings.
In other Nymex trading, heating oil gained 4.08 cents to settle at US$2.046 a gallon. Gasoline for December delivery gained 3.07 cents to settle at US$1.9903 a gallon. Natural gas for December delivery fell 22.1 cents to settle at US$4.824 per 1,000 cubic feet.
In London, Brent crude for December delivery gained US$1.35 to settle at US$76.55 on the ICE Futures exchange.
Benchmark crude for December delivery rose US$1.13 to settle at US$78.13 a barrel on the New York Mercantile Exchange after shedding US$2.87 on Friday to settle at US$77.
The Institute for Supply Management, a trade group of purchasing executives, said yesterday that U.S. manufacturing activity grew in October at the fastest pace in more than three years, helped by government spending and higher demand from overseas.
The strong report raised hopes that energy demand, which has been hampered by the recession, may be rebounding. Yet the dollar keeps falling, which has helped push oil prices higher as well.
Dollar-based oil can look like a bargain for investors holding stronger currencies.
Also yesterday, the Commerce Department reported that September construction spending posted a better-than-expected performance, powered by the largest jump in housing construction in more than six years.
And the National Association of Realtors said that the volume of signed contracts to buy previously occupied homes rose for the eighth straight month in September as buyers scrambled to take advantage of a tax credit for first-time owners that expires at the end of this month.
Oil also received a boost from a weakened dollar and strong economic data out of China, which could be a stimulus for greater oil demand.
Danske Bank said the data suggested that "the Chinese recovery remains strong and might even be gaining further strength following a slowdown during (the third quarter)."
Oil has slumped from its 2009 high of US$82 a barrel last month as the dollar reversed some of its earlier losses, but on yesterday the euro gained again on the U.S currency, rising to US$1.4753 from US$1.4730.
Investors will be paying attention to more third quarter U.S. corporate earnings results this week.
Ford Motor Co. surprised the market yesterday by reporting net income of US$1 billion in the third quarter and forecast a "solidly profitable" 2011. Ford lost more than US$14.6 billion in 2008 and hasn't posted a full-year profit since 2005.
Cisco Systems Inc., Kraft Foods Inc., Marathon Oil Corp., Starbucks Corp. and Time Warner Inc. are also scheduled to report earnings.
In other Nymex trading, heating oil gained 4.08 cents to settle at US$2.046 a gallon. Gasoline for December delivery gained 3.07 cents to settle at US$1.9903 a gallon. Natural gas for December delivery fell 22.1 cents to settle at US$4.824 per 1,000 cubic feet.
In London, Brent crude for December delivery gained US$1.35 to settle at US$76.55 on the ICE Futures exchange.
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