Oil rises towards $72 on economic hopes

Oil rises towards $72 on economic hopes
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First Published: Fri, Jun 19 2009. 11 32 AM IST
Updated: Fri, Jun 19 2009. 11 32 AM IST
Singapore: Oil rose towards $72 a barrel on Friday, extending its gains of a day earlier on bullish US economic data and supply concerns in Opec member Nigeria.
Reflecting fresh optimism for an economic turnaround, Asian equity markets snapped four days of losses, following a rally on Wall Street, where the Dow and S&P 500 broke a three-day losing streak following positive job and regional manufacturing reports.
US crude rose 28 cents to $71.65 a barrel by 11:00am, and London Brent crude gained 23 cents to $71.29.
“Prices are trailing a bit from yesterday’s upward movement. The U.S. data gave people reason for hope that a rebound in the United States may soon arrive,” said Ben Westmore, a commodities analyst at National Australia Bank.
The reading on the Philadelphia Federal Reserve business activity index was the highest since September 2008, and the Conference Board’s forward-looking measure of the US economy posted its biggest increase in five years in May.
On jobs, the number of US workers filing new claims for jobless benefits rose last week, but the number of people staying on the benefits rolls fell for the first time since January, data showed on Thursday.
The MSCI index of Asia-Pacific shares outside Japan climbed 0.9% by 11:00am, while Japan’s Nikkei average rose 0.5%.
A weaker dollar, which makes commodities cheaper for holders of other currencies, also helped crude prices.
Oil prices have nearly doubled since February on signs of a potential economic recovery but the pace of the rally has also sparked concerns that prices do not fully reflect improvements in oil fundamentals, and costly crude may hurt any nascent recovery.
President Barack Obama remains concerned about speculation in the oil markets even though he has not proposed concrete steps to rein it in, White House spokesman Robert Gibbs said on Thursday.
As a presidential candidate, Obama supported enaction of requirements that would limit US energy futures to trade only on regulated exchanges.
Oil prices also found support after Royal Dutch Shell confirmed some oil production had been halted following an attack on one of its pipelines on Wednesday in Bayelsa state in Nigeria.
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First Published: Fri, Jun 19 2009. 11 32 AM IST
More Topics: Markets | Oil | Crude | Energy | US |