Oil stays above $82 on gains by euro, equities
Oil hovers above $82 in Europe, clinging to gains as stock markets climb, dollar weakens
Oil prices stayed above $82 a barrel Tuesday, clinging to gains from the previous day fueled by a U.S. dollar drop and surging equity markets.
By early afternoon in Europe, benchmark crude for May delivery was up 17 cents to $82.34 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, it peaked at $82.74.
On Tuesday, the contract jumped $2.17 to settle at $82.17.
Crude prices have been buoyed by a yearlong rally of global stock markets. Oil traders often look to equity markets as a measure of overall investor sentiment.
The Dow Jones industrial average rose 0.4 percent Monday to its highest level since September 2008, and most Asian and European indexes rose slightly Tuesday.
“The oil complex has grabbed on to the stock indexes as a proxy for future oil demand,” Ritterbusch and Associates said in a report. “As long as a low interest rate policy is nurtured by the Fed, oil values appear poised to go up easier than they go down.”
Others reminded that despite Monday’s surge, oil prices were still within the recent $77-$84 trading levels.
“Currently range-bound oil prices are a result of optimism about a global economic recovery clashing with still weak oil market fundamentals,” said a report from JBC Energy in Vienna.
Higher oil prices were also seen reflecting efforts by fund managers to achieve positive figures to close out the first quarter of the year.
“We have very likely underestimated the potential for end-of-the-quarter window dressing,” said Olivier Jakob of Petromatrix in Switzerland.
Oil prices continued to move in the opposite direction to the dollar’s exchange rate, rising as the greenback weakened. A falling dollar makes oil cheaper to investors holding other currencies.
The euro was up to $1.3486 on Tuesday from $1.3463 on Wednesday, earlier reaching a high of $1.3536. The British pound advanced to $1.5092 from $1.4975.
In other Nymex trading in April contracts, heating oil rose 0.22 cents to $2.1210 a gallon, and gasoline was steady at $2.2613 a gallon. Natural gas fell 1 cent to $3.906 per 1,000 cubic feet.
In London, Brent crude was up 8 cents at $81.25 on the ICE futures exchange.
Associated Press writer Alex Kennedy in Singapore contributed to this report.
Original post here: Finance Yahoo
