Crude Oil Futures Recovers from Four-Day Loss
U.S. crude oil futures prices rose with the drop in the dollar and the upward trending of the broader markets, bouncing back from losses over the past four consecutive sessions.
The increases occurred with the changing of the front-month contract to November futures. In the NYMEX, the crude price per barrel for delivery in November recently traded higher by 1.3%, or $1.16, to $93.58.
In London’s ICE Futures Exchange, Brent traded higher by $1.42 cents to $111.45.
Oil moved up together with stock markets as well as several commodities like wheat and copper, pressed by a stronger European currency compared to the U.S. According to a report of the Financial Times, Spain and the European Commission are headed towards changes that will answer lenders’ demands.
Analyst Phil Flynn of Chicago’s Price Futures Group said that bailouts are bullish in general. The sharp dip in the crude price per barrel over the previous week may also have signaled the rebound, added the analyst.
A weaker U.S. currency usually helps push the per barrel oil prices higher by making the price of crude cheaper for those utilizing other currencies.
The debt crisis of Europe has kept the attention of oil traders for many months this summer following the commitment of President Mario Draghi of the European Central Bank that it will do everything possible to protect the euro.
In the month of June, per barrel oil prices had recovered from low levels of below $80 on hopes that the crisis of Europe was lessening. The decision of the Federal Reserve to offer a new round of quantitative easing also buoyed the price of crude oil.
However, over the previous week, as prices got closer to $100 per barrel, several investors were increasingly concerned that crude oil futures prices had moved up too much and were ready for a drop.
The crude inventories of the U.S. gained a higher-than-expected amount of 8.5 million barrels in the previous week, according to a recent report from the U.S. Energy Information Administration. The sharp increase in supply encouraged a lot of investors to close out their “optimistic” bets.
And yet, stocks for fuels like diesel and gasoline stay tight, keeping their prices high.
Front-month October RBOB (wholesale gasoline) just traded higher by 3.60 cents at $2.9400 per gallon. Similarly, heating oil for October traded higher by 2.99 cents at $3.1274 per gallon.