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Oil rises 3% on broad market rally
Source: Agencies |
August 16, 2011, Tuesday
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Oil jumped to the highest level in more than a week on some positive news about the global economy.
Oil was also pushed higher by a fall in the dollar. As the greenback weakens, investors who hold stronger foreign currencies are able to buy more crude. Yesterday's 3 percent rise to more than US$87 per barrel all but erased losses in oil markets last week.
Crude rose yesterday after Japan's economy shrank less than expected from April to June.
"Last week, we saw a market that was really driven by fear," PFGBest Phil Flynn said. "The data out of Japan shows that the world isn't falling off the map."
Yesterday the dollar sank and oil rose after the government reported that foreign investors cut their holdings of US Treasuries in June. The 0.4 percent decline happened when lawmakers were still fighting over a deal to increase the nation's borrowing limit.
The stock market also rose after a wave of acquisition announcements bolstered investor optimism.
China, the world's second-largest oil consumer behind the US, said that it expects its consumption to increase this year by 6.5 percent, according to Platts, the energy information arm of McGraw-Hill Cos.
Benchmark West Texas Intermediate crude for September delivery surged US$2.50 to US$87.88 per barrel on the New York Mercantile Exchange. That's the highest finish since Aug. 3.
Brent crude, which is used to price many international oil varieties, rose US$1.88 to finish at US$109.91 on the ICE Futures exchange in London.
In other Nymex trading for September contracts, heating oil rose 4.04 cents to end at US$2.9441 per gallon and gasoline futures gained 5.23 cents to end the day at US$2.8745 per gallon. Natural gas fell 3.6 cents to finish at US$4.024 per 1,000 cubic feet.
Oil was also pushed higher by a fall in the dollar. As the greenback weakens, investors who hold stronger foreign currencies are able to buy more crude. Yesterday's 3 percent rise to more than US$87 per barrel all but erased losses in oil markets last week.
Crude rose yesterday after Japan's economy shrank less than expected from April to June.
"Last week, we saw a market that was really driven by fear," PFGBest Phil Flynn said. "The data out of Japan shows that the world isn't falling off the map."
Yesterday the dollar sank and oil rose after the government reported that foreign investors cut their holdings of US Treasuries in June. The 0.4 percent decline happened when lawmakers were still fighting over a deal to increase the nation's borrowing limit.
The stock market also rose after a wave of acquisition announcements bolstered investor optimism.
China, the world's second-largest oil consumer behind the US, said that it expects its consumption to increase this year by 6.5 percent, according to Platts, the energy information arm of McGraw-Hill Cos.
Benchmark West Texas Intermediate crude for September delivery surged US$2.50 to US$87.88 per barrel on the New York Mercantile Exchange. That's the highest finish since Aug. 3.
Brent crude, which is used to price many international oil varieties, rose US$1.88 to finish at US$109.91 on the ICE Futures exchange in London.
In other Nymex trading for September contracts, heating oil rose 4.04 cents to end at US$2.9441 per gallon and gasoline futures gained 5.23 cents to end the day at US$2.8745 per gallon. Natural gas fell 3.6 cents to finish at US$4.024 per 1,000 cubic feet.
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