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Oil prices rise as new data boost hope for economy
Source: Agencies |
November 25, 2010, Thursday
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OIL prices surged yesterday as new government reports indicated Americans spent more last month and jobless claims fell more than expected last week, boosting hope that the economy may be improving.
Benchmark oil for January delivery gained US$2.61, or 3.2 percent, to settle at US$83.86 a barrel on the New York Mercantile Exchange.
A series of upbeat reports bolstered oil traders' hopes for an improving economy.
The government said consumer incomes rose 0.5 percent and spending increased 0.4 percent last month. In addition, first-time claims for unemployment benefits fell 34,000 to a seasonally adjusted 407,000 last week.
Offsetting that were reports showing durable-goods orders dropped 3.3 percent last month and sales of new homes fell 8.1 percent in October, which was near a record low.
PFGBest analyst Phil Flynn said the combination of the slowing layoffs and improving consumer data offset weak housing numbers. "That's given us hope that maybe, you know, the jobs market may be turning around," he said. The unemployment rate has been stuck at 9.6 percent.
On the energy front, commercial inventories of crude oil rose less than expected for the week of Nov. 19.
Gasoline inventories increased 1.9 million barrels. Analysts had expected a decline. U.S. refineries ran at 85.5 percent of total capacity on average, compared with 84 percent in the prior week.
Retail gasoline prices have increased about 8 percent since early September, driven by rising oil prices. They have fallen slightly this week following a drop in oil prices.
The price of gas could keep falling if refineries continue to add to the current supply, Flynn said.
Natural gas inventories held in underground storage in the lower 48 states fell by 6 billion cubic feet to 3.837 trillion cubic feet for the week ended Nov. 19, the government said. The total was still 9.5 percent more than the five-year average.
Natural gas for December delivery rose 0.3 cent to US$4.267 per 1,000 cubic feet. Since the contract expires yesterday, many traders have moved to the January contract where the price fell 2.7 cents to US$4.388 per 1,000 cubic feet.
In other Nymex trading in December contracts, heating oil added 7.59 cents to US$2.3255 a gallon and gasoline gained 7.94 cents to US$2.2136 a gallon.
In London, Brent crude rose US$2.59 to US$85.84 a barrel on the ICE Futures exchange.
Benchmark oil for January delivery gained US$2.61, or 3.2 percent, to settle at US$83.86 a barrel on the New York Mercantile Exchange.
A series of upbeat reports bolstered oil traders' hopes for an improving economy.
The government said consumer incomes rose 0.5 percent and spending increased 0.4 percent last month. In addition, first-time claims for unemployment benefits fell 34,000 to a seasonally adjusted 407,000 last week.
Offsetting that were reports showing durable-goods orders dropped 3.3 percent last month and sales of new homes fell 8.1 percent in October, which was near a record low.
PFGBest analyst Phil Flynn said the combination of the slowing layoffs and improving consumer data offset weak housing numbers. "That's given us hope that maybe, you know, the jobs market may be turning around," he said. The unemployment rate has been stuck at 9.6 percent.
On the energy front, commercial inventories of crude oil rose less than expected for the week of Nov. 19.
Gasoline inventories increased 1.9 million barrels. Analysts had expected a decline. U.S. refineries ran at 85.5 percent of total capacity on average, compared with 84 percent in the prior week.
Retail gasoline prices have increased about 8 percent since early September, driven by rising oil prices. They have fallen slightly this week following a drop in oil prices.
The price of gas could keep falling if refineries continue to add to the current supply, Flynn said.
Natural gas inventories held in underground storage in the lower 48 states fell by 6 billion cubic feet to 3.837 trillion cubic feet for the week ended Nov. 19, the government said. The total was still 9.5 percent more than the five-year average.
Natural gas for December delivery rose 0.3 cent to US$4.267 per 1,000 cubic feet. Since the contract expires yesterday, many traders have moved to the January contract where the price fell 2.7 cents to US$4.388 per 1,000 cubic feet.
In other Nymex trading in December contracts, heating oil added 7.59 cents to US$2.3255 a gallon and gasoline gained 7.94 cents to US$2.2136 a gallon.
In London, Brent crude rose US$2.59 to US$85.84 a barrel on the ICE Futures exchange.
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