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The US dollar knows only one direction, helping oil price
Published on October 15, 2009 by oilprices · No CommentsCrude oil futures prices reached a one year high in NYMEX trading on optimism oil demand will increase amid improved prospects for an economic recovery in the US, the world’s biggest energy consumer.
Oil prices rose for a sixth day as the dollar declined and equities advanced around the world. Prices also climbed after a report from the American Petroleum Institute showed a decline in US crude oil and gasoline stockpiles last week. The Energy Department is expected to report a drop in distillate inventories today.
“The big increase after this market broke above $75 yesterday shows it’s possible for prices to accelerate further in the near term,” said Ken Hasegawa, a commodity derivatives sales manager at brokers Newedge in Tokyo. “The trend for stocks and commodities is higher still.”
Crude oil for November delivery climbed as much as 78 cents, or 1 percent, to $75.96 a barrel in electronic trading on the NYMEX. That’s the highest intraday price since Oct. 20, 2008. The contract was at $75.93 a barrel at 11:35 a.m. Singapore time. Yesterday, it added 1.4 percent to $75.18 a barrel, the highest settlement since Oct. 14, 2008. Brent crude oil for November settlement rose as much as 76 cents, or 1 percent, to $73.86 a barrel on the London based ICE Futures Europe exchange.
Oil prices have gained 6 percent this week as equity markets rallied. The Dow Jones Industrial Average broke 10,000 yesterday for the first time in a year on better-than-estimated earnings at JPMorgan Chase & Co. and Intel Corp. The gauge jumped 144.8 points, or 1.5 percent, to 10,015.86, the highest level since Oct. 3 last year.
“The US dollar knows only one direction and that is helping the oil price,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney.