Euro makes comeback, Crude Oil Prices on the rise
With the euro making a comeback after a six month slump, commodities are seeing a return of interest, as an alternative has been provided for the weakened dollar. As a result, crude oil prices have seen an increase for the first time in over three days.
The euro’s strengthened positions have mended some of the losses sustained by the perpetual worries over Europe’s debt situation. Italy is currently in negotiations with China over bond purchasing.
Crude oil futures rose 95 cents, a number that will likely sustain or increase through October. The rise totals 1.1% at the moment and has placed the oil commodity at $88.19 per barrel. The upswing comes as a welcome relief since the commodity has plunged 3.5% over the year so far.
Brent crude oil prices took a 52 cent dip and are now at $112.25 per barrel.
The benchmark for Europe was placed at $24.06 as opposed to the futures in the States, making for the narrowest spread the nations have seen since late August. A $1.47 difference was recorded in the per barrel differential. Early September saw the spread hit a peak at $27.22.
Economic analysts have stated that the general feel investors are getting from the paranoia over the second coming of the recession is that “it looks so grim at the moment that it could not possible get any grimmer.”
Fears of Greece defaulting on its soaring debt however drove the euro and New York crude oil prices down.
The U.S. did not show much enthusiasm for President’s Obama’s promise of new jobs, and the situation was not helped by the Federal Reserve failing to announce expected stimulus measures.
Some analysts have stated that crude oil will simply continue to swing back and forth, depending on the global outlook of the economy. “Crude prices rise when economic indicators favour it, yet as soon as the tide turns to Greece possibly defaulting, crude prices dip severely.”
Crude oil markets will most likely rein themselves in for the remainder of this year and well into 2012, as the U.S. Petroleum Reserve releases its last product.
Libya’s return to the crude oil game will also likely affect the market.