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Oil rebounds on European loan package
Source: Agencies |
May 11, 2010, Tuesday
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OIL snapped a four-day losing streak and rebounded from last week's sell-off, rising to US$78 a barrel yesterday before reversing some gains after Europe and the IMF pledged nearly US$1 trillion to help defend the embattled euro.
Benchmark crude for June delivery rose US$1.69 to settle at US$76.80 on the New York Mercantile Exchange. It hit a day high of US$78.51 in earlier trading.
The European Union Commission and International Monetary Fund pledged a loan package of €750 billion (US$975 billion) yesterday after the euro plunged last week amid investor concerns a debt crisis in Greece could spread to other European countries.
"This positive sentiment should last in the short term and help oil prices to recover further, especially as U.S. labor market data, with a stronger-than-expected rise in jobs, have kindled hopes of a revival of oil demand from the world's largest consumer," said a report from Commerzbank in Frankfurt. "That said, the recovery of prices is merely a technical countermovement to the sharp price losses of the days before. The fundamental data on the oil market still suggest for lower oil prices."
Crude prices are down from an 18-month high of US$87.15 a barrel early last week as the debt crisis battered the euro, which rallied yesterday to US$1.2995 from US$1.2759, before drifting back to US$1.2825 in morning New York trading.
Commodities priced in dollars, such as oil, become less expensive for investors holding euros as the U.S. currency weakens.
Asian, European and U.S. stocks rose sharply yesterday after falling most of last week.
Meanwhile, analysts said the oil spill in the Gulf of Mexico may start to be "increasingly problematic" for ships using the Mississippi's Southwest Pass, as the spill moves west rather than east.
"If the current trend continues we should not discount the possibility that ships moving up north the Mississippi will soon have to go through the cleaning stations, which would delay the transit times," said Olivier Jakob of Petromatrix in Switzerland.
In other Nymex trading in June contracts, heating oil rose 4.07 cents to settle at US$2.1202 a gallon, and gasoline added 4.75 cents to settle at US$2.1726 a gallon. Natural gas gained 15.5 cents to settle at US$4.170 per 1,000 cubic feet.
In London, Brent crude climbed US$1.85 to settle at US$80.12 on the ICE futures exchange.
Benchmark crude for June delivery rose US$1.69 to settle at US$76.80 on the New York Mercantile Exchange. It hit a day high of US$78.51 in earlier trading.
The European Union Commission and International Monetary Fund pledged a loan package of €750 billion (US$975 billion) yesterday after the euro plunged last week amid investor concerns a debt crisis in Greece could spread to other European countries.
"This positive sentiment should last in the short term and help oil prices to recover further, especially as U.S. labor market data, with a stronger-than-expected rise in jobs, have kindled hopes of a revival of oil demand from the world's largest consumer," said a report from Commerzbank in Frankfurt. "That said, the recovery of prices is merely a technical countermovement to the sharp price losses of the days before. The fundamental data on the oil market still suggest for lower oil prices."
Crude prices are down from an 18-month high of US$87.15 a barrel early last week as the debt crisis battered the euro, which rallied yesterday to US$1.2995 from US$1.2759, before drifting back to US$1.2825 in morning New York trading.
Commodities priced in dollars, such as oil, become less expensive for investors holding euros as the U.S. currency weakens.
Asian, European and U.S. stocks rose sharply yesterday after falling most of last week.
Meanwhile, analysts said the oil spill in the Gulf of Mexico may start to be "increasingly problematic" for ships using the Mississippi's Southwest Pass, as the spill moves west rather than east.
"If the current trend continues we should not discount the possibility that ships moving up north the Mississippi will soon have to go through the cleaning stations, which would delay the transit times," said Olivier Jakob of Petromatrix in Switzerland.
In other Nymex trading in June contracts, heating oil rose 4.07 cents to settle at US$2.1202 a gallon, and gasoline added 4.75 cents to settle at US$2.1726 a gallon. Natural gas gained 15.5 cents to settle at US$4.170 per 1,000 cubic feet.
In London, Brent crude climbed US$1.85 to settle at US$80.12 on the ICE futures exchange.
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