Oil tops $100 on stock surge, euro optimism
Futures off session highs but up 2.6%
By Claudia Assis and V. Phani Kumar, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures topped $100 a barrel Monday, spurred by a strong start to the holiday-shopping season, a weaker dollar, and a surge for equities.
Light, sweet crude futures for January delivery CL2F +1.34% advanced $2.49, or 2.6%, to $99.26 a barrel on the New York Mercantile Exchange. The contract traded as high as $100.73 in electronic trading ahead of the floor open.
Front-month crude futures had last hit the $100-mark on Nov. 16, when they topped $102 a barrel.
Markets “are loving” news about the euro zone, said Matt Smith, an oil analyst with Summit Energy, in a note to clients.
European officials have agreed on how to leverage a rescue fund for the region, according to news reports. Read more about the reported agreement.
In addition, “there is a broad rally underway in risk assets“ and a bit of geopolitical tensions in oil-rich countries, he said.
The jump came in the wake of a strong start to the holiday-shopping season. A report form ShopperTrak said U.S. retailers’ “Black Friday” sales rose 7% from last year’s day-after-Thanksgiving, to $11.4 billion. Read more on Black Friday sales.
Some geopolitical risk premium was in place “due to instability in the (Middle East and North Africa) area,” analysts at JBC Energy said in a report to clients.
“Besides civil unrest in Syria and Yemen, sectarian tensions in Saudi Arabia are also on the rise,” they said. “Meanwhile, stricter sanctions have been placed on Iran with some European countries even considering a ban on oil imports,” they wrote.
The Arab League also imposed sanctions on Syria in a bid to force an end to the violence in the country.
Meanwhile, moves in the dollar and the stock market also kept crude supported.
The U.S. dollar index DXY -0.65% slipped to 78.982 from 79.688 in North American trading Friday, boosting commodities priced in the greenback, including crude oil. Read currencies report.
U.S. stocks surged at the opening, with the Dow Jones Industrial Average DJIA +2.76% rising more than 250 points after dropping in the previous four sessions.
Most energy products tracked crude higher on Monday, with natural gas the outlier.
December natural gas NG11Z -2.80% slipped 10 cents, or 2.9%, to $3.44 per million British thermal units. Natural gas notched a 6.6% weekly gain last week.
December gasoline RB1Z +2.76% rose 8 cents, or 3.1%, to $2.53 per gallon. Heating oil for the same month’s delivery HO1Z +1.37% advanced 6 cents, or 2.1%, to $2.99 a gallon.
Prices kept higher after news sales of new single-family homes barely changed in October, with little evidence of major improvements in the battered U.S. housing market.
New-home sales edged up to an annual rate of 307,000 in October. Economists polled by MarketWatch had expected a rise to 320,000.
From MarketWatch.com
