Oil prices closed almost 2 percent higher on Thursday (18/11), after four days of losses due to concern over Ireland’s debt crisis eased, but push the dollar lower and stimulate the appetite for risk in stocks and other commodities.
Hopes Soar Driven Oil Ireland
Coal produced by Berau Coal being loaded onto the ship Monrovia Beijing 2008, East Kalimantan, August 17, 2010.
Gasoline led the rally, gaining more than 3 percent after a huge unexpected drop 2.66 million barrels in gasoline stocks, reported on Wednesday, sparking concerns about the stringent conditions in New York Harbor where the cash difference was hovering near its highest level in two years.
U.S. crude for December delivery was set at U.S. $ 1.41 or 1.75 percent, higher to U.S. $ 81.85 per barrel.
Prices also got a boost from both the withdrawal of 7.3 million barrels in crude stocks in government data reported on Wednesday, the biggest weekly decline in 14 months.
U.S. gasoline for December rose 7.04 cents, or 3.26 percent, is set to U.S. $ 2.2283 per gallon.
Gasoline crack spread of next month, after crude oil refiner margins are processed into fuel, was closed to U.S. $ 11.74 per barrel, the highest since June 22 when the spread closed at U.S. $ 12.40.
Brent oil for January closed down U.S. $ 1.77, or 2.13 percent to U.S. $ 85.05.
Before the rebound of the day, worries about the fiscal health of the euro zone that has triggered a rebound in the dollar and fears over further tightening of monetary policy China has been hit about 8 percent of 25-month high hit last week, sending oil to U.S. $ 80.06 on Wednesday, lowest price since October 20.
“The purchase is also backed by the ability to keep crude oil above U.S. $ 80 yesterday,” said Rich Ilczysyn, senior market strategist at Lind-Waldock in Chicago.
DOLLAR DOWN, AS DATA hit
The dollar fell about 0.6 percent against a basket of currencies after Ireland’s central bank chief said on Thursday that he hopes the state can take tens of billions of euro loan from European partners, and the IMF could cope with its debt woes.
“For now the market seems more relaxed that the measures being put in place (in Ireland),” said Jim Reid, a strategist at Deutsche Bank.
Energy futures attract additional support from economic data showed manufacturing activity in the U.S. mid-Atlantic region touches one-month high this year, and the latest U.S. claims for unemployment benefits from the increase almost in the last week.
Although additional data on the economic picture improves after the summer slowdown, it is impossible to prevent the Federal Reserve of the settlement plan to buy $ 600 billion in U.S. Treasury bonds to further stimulate growth.
Bouncing from the lowest four weeks, oil prices hardened by doubts over the financial condition of other eurozone countries.
“Even the Irish should be saved, so in speaking, the market may shift its focus back to Greece and Portugal,” said Eugen Weinberg, an analyst at Commerzbank.
Concerns about the impact of fiscal policy tightening in China is anticipated to continue to weigh on the market, despite an academic advisor to the People’s Bank of China said China should not rely solely on interest rates higher to curb inflation, but sought to quell speculation about a rate hike.
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