NYMEX light crude oil up $2 a barrel, US retail sales jump

NYMEX light crude oil traded up more than $2 a barrel in New York as sales at US retailers surged in August and Federal Reserve Chairman Ben S. Bernanke said the worst US recession since the 1930s has probably ended.

Oil climbed 3 percent and equities advanced for the seventh time in eight days after Commerce Department figures showed that sales climbed by the most in three years. The dollar weakened, bolstering the attractiveness of commodities as an alternative investment. OPEC raised its oil demand forecast for this year and 2010 in a report today.

“The falling dollar, the OPEC forecasts for increased demand and the economic data, especially the retail sales number, meant it was just a matter of time before oil climbed,” said John Kilduff, senior vice president of energy at MF Global in New York. “You are seeing strength in almost all of the commodities.” Crude oil for October delivery rose $2.07 to settle at $70.93 a barrel at 2:46 p.m. on the New York Mercantile Exchange, the biggest increase since Sept. 8. Prices are up 59 percent this year.

Prices retreated from the settlement after the American Petroleum Institute reported that US stockpiles rose 631,000 barrels to 336.9 million last week. Oil was up $1.59, or 2.3 percent, to $70.45 a barrel at 4:35 p.m.

Separate reports today signaled manufacturers will help bolster the US economy as they ramp up production after a record inventory drawdown in the first half of 2009. Business inventories declined 1 percent in July, exceeding economists’ forecasts, to $1.33 trillion, the lowest level since March 2006, a Commerce Department report showed.

Tags:  light oil prices, NYMEX, US