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Oil rises on weak dollar, rising stock markets
Source: Agencies |
November 17, 2009, Tuesday
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Online Edition
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AFTER hitting their lowest level in a month, oil prices bounced back and settled near US$79 yesterday on the back of a weaker dollar and rising global stock markets.
Benchmark crude for December delivery rose US$2.55 to settle at US$78.90 a barrel on the New York Mercantile Exchange. On Friday, the contract fell as low as US$75.57, the cheapest since Oct. 15, before settling 59 cents down at US$76.35.
Stock markets in Asia and Europe rose yesterday after Japan reported its economy expanded at an annual rate of 4.8 percent in the third quarter. That was the second straight quarter of expansion and the biggest rise since 2007.
U.S. stock markets also were up after a new report showed retail sales rebounded more than expected in October because of a boost in auto sales.
At the same time, the euro pushed back toward the US$1.50 level against the dollar.
Commodities such as oil and gold are priced in dollars so they become cheaper when the dollar falls.
Crude prices fell last week and U.S. stock markets rose as investors started to focus more on the continued weak demand for oil.
"That could be the beginning of the disconnect as the fundamentals weigh on oil," said Jim Ritterbusch of Ritterbusch and Associates.
For most of the year, oil prices surged as investors pumped money into crude contracts to protect themselves from a weaker dollar. Oil was seen as a safer bet with demand expected to rise next year as the world's economies begin to recover.
In other Nymex trading, heating oil rose 6.59 cents to settle at US$2.0320 a gallon. Gasoline for December delivery gained 7.06 cents to settle at US$1.9868 a gallon. Natural gas for December delivery advanced 22.2 cents to settle at US$4.614 per 1,000 cubic feet.
In London, Brent crude for December delivery rose US$2.45 to settle at US$78.76 on the ICE Futures exchange.
Benchmark crude for December delivery rose US$2.55 to settle at US$78.90 a barrel on the New York Mercantile Exchange. On Friday, the contract fell as low as US$75.57, the cheapest since Oct. 15, before settling 59 cents down at US$76.35.
Stock markets in Asia and Europe rose yesterday after Japan reported its economy expanded at an annual rate of 4.8 percent in the third quarter. That was the second straight quarter of expansion and the biggest rise since 2007.
U.S. stock markets also were up after a new report showed retail sales rebounded more than expected in October because of a boost in auto sales.
At the same time, the euro pushed back toward the US$1.50 level against the dollar.
Commodities such as oil and gold are priced in dollars so they become cheaper when the dollar falls.
Crude prices fell last week and U.S. stock markets rose as investors started to focus more on the continued weak demand for oil.
"That could be the beginning of the disconnect as the fundamentals weigh on oil," said Jim Ritterbusch of Ritterbusch and Associates.
For most of the year, oil prices surged as investors pumped money into crude contracts to protect themselves from a weaker dollar. Oil was seen as a safer bet with demand expected to rise next year as the world's economies begin to recover.
In other Nymex trading, heating oil rose 6.59 cents to settle at US$2.0320 a gallon. Gasoline for December delivery gained 7.06 cents to settle at US$1.9868 a gallon. Natural gas for December delivery advanced 22.2 cents to settle at US$4.614 per 1,000 cubic feet.
In London, Brent crude for December delivery rose US$2.45 to settle at US$78.76 on the ICE Futures exchange.
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