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Oil rises above US$75 as global equities rally
Source: Agencies |
June 15, 2010, Tuesday
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OIL prices rose above US$75 a barrel yesterday as rallying stock markets and a stronger euro bolstered investor confidence.
Benchmark crude for July delivery rose US$1.34 to settle at US$75.12 a barrel on the New York Mercantile Exchange.
Stock markets gained yesterday as traders bet the global economic recovery will continue. Crude investors often look to equities as a barometer of overall investor sentiment. The Dow Jones Industrial Average was up about 40 points in afternoon trading. The Nasdaq and the S&P 500 were higher as well. Stocks backed off earlier highs after Moody's downgraded Greece's credit rating.
A weaker dollar and a stronger euro also helped oil prices. Since crude is priced in dollars it becomes cheaper to investors holding other currencies when the dollar loses value.
Investors will be eyeing reports on US housing starts, industrial production and consumer prices this week for clues about the strength of the global economy.
Oil prices rose 3.2 percent last week despite weak US jobs and retail sales figures, a sign that suggests crude may continue to climb this week.
BP said yesterday that the cost of its massive oil spill in the Gulf of Mexico has risen to US$1.6 billion. The estimate does not include future costs for lawsuits already filed against the company over the spill that began nearly two months ago. The spill, so far, has not affected oil prices, although BP shares have tumbled. BP stock was down almost 8 percent yesterday.
In other Nymex trading in July contracts, heating oil rose 1.97 cents to settle at US$2.0250 a gallon, and gasoline gained 2.67 cents to settle at US$2.0764 a gallon. Natural gas jumped 22.5 cents to settle at US$5.006 per 1,000 cubic feet.
Brent crude gained 85 cents to settle at US$75.20 a barrel on the ICE futures exchange.
Benchmark crude for July delivery rose US$1.34 to settle at US$75.12 a barrel on the New York Mercantile Exchange.
Stock markets gained yesterday as traders bet the global economic recovery will continue. Crude investors often look to equities as a barometer of overall investor sentiment. The Dow Jones Industrial Average was up about 40 points in afternoon trading. The Nasdaq and the S&P 500 were higher as well. Stocks backed off earlier highs after Moody's downgraded Greece's credit rating.
A weaker dollar and a stronger euro also helped oil prices. Since crude is priced in dollars it becomes cheaper to investors holding other currencies when the dollar loses value.
Investors will be eyeing reports on US housing starts, industrial production and consumer prices this week for clues about the strength of the global economy.
Oil prices rose 3.2 percent last week despite weak US jobs and retail sales figures, a sign that suggests crude may continue to climb this week.
BP said yesterday that the cost of its massive oil spill in the Gulf of Mexico has risen to US$1.6 billion. The estimate does not include future costs for lawsuits already filed against the company over the spill that began nearly two months ago. The spill, so far, has not affected oil prices, although BP shares have tumbled. BP stock was down almost 8 percent yesterday.
In other Nymex trading in July contracts, heating oil rose 1.97 cents to settle at US$2.0250 a gallon, and gasoline gained 2.67 cents to settle at US$2.0764 a gallon. Natural gas jumped 22.5 cents to settle at US$5.006 per 1,000 cubic feet.
Brent crude gained 85 cents to settle at US$75.20 a barrel on the ICE futures exchange.
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