Oil advanced from an eight-week low on speculation China’s government will bolster stimulus efforts and as Spain’s cabinet met to approve a 2013 austerity budget.
Futures rose as much as 2 percent and equities gained on signals China will announce measures to boost the economy after the Shanghai Composite Index (MXWD) fell below the 2,000 level.
Spain’s Prime Minister Mariano Rajoy has promised to cut the deficit by at least 18 billion euros ($23.2 billion) next year. The U.S. grew less than previously forecast in the second quarter.
“The crude market is bouncing with equities on speculation China will take action to improve the economy and on the Spanish budget announcement, which is being seen as a positive development,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York.
This was “enough to get us to shrug off the downward revision in GDP.” Crude oil for November delivery rose $1.20, or 1.3 percent, to $91.18 a barrel at 10:47 a.m. on the New York Mercantile Exchange. The contract dropped to $89.98 yesterday, the lowest settlement since Aug. 2.
Prices are down 5.5 percent this month and up 7.3 percent this quarter. Brent oil for November settlement increased $1.50, or 1.4 percent, to $111.54 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark grade’s premium to West Texas Intermediate crude traded in New York was $20.36. New York futures are rebounding after approaching technical support at $88.35 a barrel, Yawger said.
That’s the 50 percent Fibonacci retracement of the rise to $99 on Sept. 14 from the 2012 settlement low of $77.69 in June.
Equities Gain
The MSCI All-Country World Index climbed 0.5 percent at 10:53 a.m. in New York, rebounding from its biggest drop since July.
The Standard & Poor’s 500 Index (SPX) advanced 0.4 percent to halt a five-day slump. Rajoy is defying anti-austerity protesters and dissent from regional leaders as he struggles to convince investors he can contain the crisis and avoid asking for a full bailout.
Europe’s debt crisis has reduced economic growth and the continent’s energy demand for three years. The crisis that began in Greece has spread to Ireland, Portugal, Italy, Spain and Cyprus.
The U.S. economy expanded at a 1.3 percent pace from April through June after growing at a 2 percent rate in the first quarter, the Commerce Department said.
The revision compared with a prior estimate of 1.7 percent and the Bloomberg survey’s 1.7 percent median forecast.
Another report showed orders placed with American factories for durable goods in August slumped 13 percent, the most since January 2009.
Excluding volatile demand for items such as airplanes and automobiles, the decline was 1.6 percent.
Applications for jobless benefits decreased 26,000 to 359,000 in the week ended Sept. 22, the lowest level since July, Labor Department figures showed today.
Biggest Consumers
The U.S. and China are the world’s biggest oil-consuming countries, accounting for a combined 32 percent of world demand, according to BP Plc (BP/)’s Statistical Review of World Energy.
The 27 members of the European Union were responsible for 16 percent of global oil use in 2011, BP said.
Crude oil price also increased after gasoline surged to the highest level in almost five months on concern that refinery shutdowns in the Atlantic Basin will further reduce stockpiles on the U.S. East Coast.
“We’re getting support from motor gasoline,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania.
“The fundamental value of crude oil is based on the supply and demand for products such as gasoline.”
Gasoline for October delivery rose 5.82 cents, or 1.9 percent, to $3.1393 a gallon in New York. Prices touched $3.2086, the highest intraday price since April 30.
bloomberg.com
Futures rose as much as 2 percent and equities gained on signals China will announce measures to boost the economy after the Shanghai Composite Index (MXWD) fell below the 2,000 level.
Spain’s Prime Minister Mariano Rajoy has promised to cut the deficit by at least 18 billion euros ($23.2 billion) next year. The U.S. grew less than previously forecast in the second quarter.
“The crude market is bouncing with equities on speculation China will take action to improve the economy and on the Spanish budget announcement, which is being seen as a positive development,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York.
This was “enough to get us to shrug off the downward revision in GDP.” Crude oil for November delivery rose $1.20, or 1.3 percent, to $91.18 a barrel at 10:47 a.m. on the New York Mercantile Exchange. The contract dropped to $89.98 yesterday, the lowest settlement since Aug. 2.
Prices are down 5.5 percent this month and up 7.3 percent this quarter. Brent oil for November settlement increased $1.50, or 1.4 percent, to $111.54 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark grade’s premium to West Texas Intermediate crude traded in New York was $20.36. New York futures are rebounding after approaching technical support at $88.35 a barrel, Yawger said.
That’s the 50 percent Fibonacci retracement of the rise to $99 on Sept. 14 from the 2012 settlement low of $77.69 in June.
Equities Gain
The MSCI All-Country World Index climbed 0.5 percent at 10:53 a.m. in New York, rebounding from its biggest drop since July.
The Standard & Poor’s 500 Index (SPX) advanced 0.4 percent to halt a five-day slump. Rajoy is defying anti-austerity protesters and dissent from regional leaders as he struggles to convince investors he can contain the crisis and avoid asking for a full bailout.
Europe’s debt crisis has reduced economic growth and the continent’s energy demand for three years. The crisis that began in Greece has spread to Ireland, Portugal, Italy, Spain and Cyprus.
The U.S. economy expanded at a 1.3 percent pace from April through June after growing at a 2 percent rate in the first quarter, the Commerce Department said.
The revision compared with a prior estimate of 1.7 percent and the Bloomberg survey’s 1.7 percent median forecast.
Another report showed orders placed with American factories for durable goods in August slumped 13 percent, the most since January 2009.
Excluding volatile demand for items such as airplanes and automobiles, the decline was 1.6 percent.
Applications for jobless benefits decreased 26,000 to 359,000 in the week ended Sept. 22, the lowest level since July, Labor Department figures showed today.
Biggest Consumers
The U.S. and China are the world’s biggest oil-consuming countries, accounting for a combined 32 percent of world demand, according to BP Plc (BP/)’s Statistical Review of World Energy.
The 27 members of the European Union were responsible for 16 percent of global oil use in 2011, BP said.
Crude oil price also increased after gasoline surged to the highest level in almost five months on concern that refinery shutdowns in the Atlantic Basin will further reduce stockpiles on the U.S. East Coast.
“We’re getting support from motor gasoline,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania.
“The fundamental value of crude oil is based on the supply and demand for products such as gasoline.”
Gasoline for October delivery rose 5.82 cents, or 1.9 percent, to $3.1393 a gallon in New York. Prices touched $3.2086, the highest intraday price since April 30.
bloomberg.com
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