» Subscribe Today!
The Power of Information
Home
The Ledger - EST. 1978 - Nashville Edition
X
Skip Navigation LinksHome > Article
VOL. 35 | NO. 19 | Friday, May 13, 2011




Oil above $100 as traders eye dollar, recovery

Print | Front Page | Email this story

Oil prices inched above $100 a barrel Thursday thanks to the effects of a stronger dollar, but gains were limited by the International Energy Agency's warning that expensive crude was hurting the global economy.

By early afternoon in Europe, benchmark crude for June delivery was up 41 cents to $100.51 a barrel in electronic trading on the New York Mercantile Exchange.

In London, Brent crude for July delivery gained 50 cents to $112.80 a barrel on the ICE Futures exchange.

The Paris-based IEA's Governing Board said that despite a recent price correction, it continued to have "serious concerns" about the negative effect of oil at current levels.

The IEA said the rise in oil prices since September had a negative effect on the economic recovery "by widening global imbalances, reducing household and business income, and placing upward pressure on inflation and interest rates."

"Additional increases in prices at this stage of the economic cycle risk derailing the global economic recovery and are neither in the interest of producing nor of consuming countries."

Oil markets have been following the value of the dollar most days recently. A weaker dollar makes oil less expensive for investors with other currencies and usually helps push crude higher, while a stronger U.S. currency tends to lead commodities lower.

The euro fell to $1.4270 on Thursday from $1.4296 late Wednesday while the dollar gained to 81.88 yen from 81.69 yen.

"It would appear the stage is set for a further crude price advance back toward the $104 area, however, such an up-move will be highly contingent on additional dollar weakening," Ritterbusch and Associates said in a report.

Traders are struggling to gauge the strength of U.S. crude and gasoline demand heading into the summer driving season.

On Wednesday, oil rose $3.19, or 3.3 percent, to settle at $100.10 after the Energy Department's Energy Information Administration said crude supplies fell 15,000 barrels while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos. had predicted an increase of 500,000 barrels.

However, gasoline inventories inched higher and earlier this week, MasterCard SpendingPulse's weekly survey of retail gas demand showed a drop for the eighth straight week.

Some analysts considered Wednesday's upswing a likely exception, with the recent volatility making the sharp fluctuations "par for the course."

"We think the run higher could continue for a little while longer," said analysts at Commerzbank in Frankfurt. "However, in the absence of any upside catalyst that can be considered a pivotal event, we suspect the move will ultimately be regarded as nothing more than a technical 'relief rally' in what is still a down market."

In other Nymex trading in June contracts, heating oil rose 0.5 cent to $2.9109 a gallon and gasoline gained 1.14 cents to $2.9669 a gallon. Natural gas futures slid 0.9 cent to $4.189 per 1,000 cubic feet.

-- Associated Press

Follow us on Facebook, Twitter & RSS:
Sign-Up For Our FREE email edition
Get the news first with our free weekly email
Name
Email  
TNLedger.com Knoxville Editon
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 0 0 0
MORTGAGES 0 0 0
FORECLOSURE NOTICES 0 0 0
BUILDING PERMITS 0 0 0
BANKRUPTCIES 0 0 0
BUSINESS LICENSES 0 0 0
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0