Commonground
Senior Moderator
By Mark Shenk
Feb. 26 (Bloomberg) -- Crude oil rose after a report showed the U.S. economy grew at a 5.9 percent annual rate in the fourth quarter, signaling that fuel demand may climb in the world?s biggest energy-consuming country.
Oil increased 1.9 percent after the Commerce Department said gross domestic product gained by the most in six years. The growth rate was higher than the government reported last month. Federal Reserve Chairman Ben S. Bernanke said this week that the U.S. economy is in a ?nascent? recovery.
?The positive GDP number is putting upward pressure on prices,? said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. ?We are going to be focused on anything that gives an indication of where the economy is going.?
Crude oil for April delivery rose $1.49 to settle at $79.66 a barrel on the New York Mercantile Exchange. The April contract declined 0.5 percent this week. Prices advanced 9.3 percent this month, the biggest gain since May.
Gasoline for March delivery climbed 4.18 cents, or 2.1 percent, to end the session at $2.0788 a gallon in New York. Heating oil for March delivery increased 3.87 cents, or 2 percent, to settle at $2.0249 a gallon.
The U.S. economy was forecast to have grown at a 5.7 percent annual pace, the same rate the government initially reported in January, according to the median estimate of 76 economists in a Bloomberg News survey.
?Shot of Confidence?
?The GDP number is giving us a shot of confidence,? said Phil Flynn, vice president of research at PFGBest in Chicago.
Business activity in the U.S. expanded in February at the fastest pace since 2005, a private report showed. The Institute for Supply Management-Chicago Inc. today said that its business barometer climbed to 62.6 from 61.5 last month. Readings greater than 50 signal expansion.
?The last barrier for the markets to rally was to get some decent reports on the economy and that?s happening,? said James Cordier, portfolio manager at OptionSellers.com in Tampa, Florida.
The U.K.?s gross domestic product rose 0.3 percent from the third quarter, compared with a previous calculation of 0.1 percent growth, the Office for National Statistics said today in London. The median forecast in a Bloomberg News survey of 27 economists was for a 0.2 percent increase.
Weaker Dollar
The increase in prices accelerated as the dollar dropped against the euro. A weaker U.S. currency bolsters the appeal of raw materials as an alternative investment. The greenback traded at $1.3618 per euro, down 0.5 percent from $1.3548 yesterday.
The Reuters/Jefferies CRB Index of 19 commodities climbed 1.4 percent to 274.77. Gold futures for April delivery rose $10.40, or 0.9 percent, to settle at $1,118.90 an ounce on the Comex division of the Nymex.
?Oil has recovered because of the first signs of economic growth,? said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. ?Stocks in floating storage have been diminishing.?
The number of tankers used as floating storage for crude oil and diesel fell 20 percent in January, according to a Feb. 8 report from Simpson, Spence & Young Ltd., the world?s second- largest shipbroker.
JPMorgan Chase & Co. raised its 2010 forecast for crude oil traded in New York by 6.7 percent, partly because of reduced inventories in floating storage.
Oil Forecast
West Texas Intermediate crude oil will average $83.50 a barrel this year, JPMorgan said yesterday. That?s up from a previous forecast of $78.25. JPMorgan also increased its outlook for global oil demand by 110,000 barrels a day to 86.3 million barrels a day. The International Energy Agency on Feb. 11 raised its forecast for oil demand in 2010.
The Organization of Petroleum Exporting Countries increased crude-oil production by 125,000 barrels a day, or 0.4 percent, to an average 29.17 million barrels a day in February, the highest level since December 2008, a Bloomberg News survey showed. Saudi Arabia led the gain, with output rising 100,000 barrels a day to 8.25 million.
Brent crude for April settlement rose $1.30, or 1.7 percent, to end the session at $77.59 a barrel on the London-based ICE Futures Europe exchange.
Oil in New York fell 2.3 percent yesterday after the number of Americans filing first-time claims for unemployment benefits unexpectedly gained in the week ended Feb. 20, and durable goods orders excluding transportation dropped in January.
?This move higher shouldn?t be a surprise because we?ve come off a great deal,? said Michael Fitzpatrick, vice president of energy at MF Global in New York. ?We aren?t trading in any new territory.?
Oil volume on the Nymex was 525,694 contracts as of 3:15 p.m. in New York. Volume totaled 510,779 contracts yesterday, 14 percent lower the average of the past three months. Open interest was 1.28 million contracts.
To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net
Last Updated: February 26, 2010 16:27 EST
http://www.bloombergnews.com/apps/news?pid=20601087&sid=akSe6d86LDqY&pos=4
Feb. 26 (Bloomberg) -- Crude oil rose after a report showed the U.S. economy grew at a 5.9 percent annual rate in the fourth quarter, signaling that fuel demand may climb in the world?s biggest energy-consuming country.
Oil increased 1.9 percent after the Commerce Department said gross domestic product gained by the most in six years. The growth rate was higher than the government reported last month. Federal Reserve Chairman Ben S. Bernanke said this week that the U.S. economy is in a ?nascent? recovery.
?The positive GDP number is putting upward pressure on prices,? said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. ?We are going to be focused on anything that gives an indication of where the economy is going.?
Crude oil for April delivery rose $1.49 to settle at $79.66 a barrel on the New York Mercantile Exchange. The April contract declined 0.5 percent this week. Prices advanced 9.3 percent this month, the biggest gain since May.
Gasoline for March delivery climbed 4.18 cents, or 2.1 percent, to end the session at $2.0788 a gallon in New York. Heating oil for March delivery increased 3.87 cents, or 2 percent, to settle at $2.0249 a gallon.
The U.S. economy was forecast to have grown at a 5.7 percent annual pace, the same rate the government initially reported in January, according to the median estimate of 76 economists in a Bloomberg News survey.
?Shot of Confidence?
?The GDP number is giving us a shot of confidence,? said Phil Flynn, vice president of research at PFGBest in Chicago.
Business activity in the U.S. expanded in February at the fastest pace since 2005, a private report showed. The Institute for Supply Management-Chicago Inc. today said that its business barometer climbed to 62.6 from 61.5 last month. Readings greater than 50 signal expansion.
?The last barrier for the markets to rally was to get some decent reports on the economy and that?s happening,? said James Cordier, portfolio manager at OptionSellers.com in Tampa, Florida.
The U.K.?s gross domestic product rose 0.3 percent from the third quarter, compared with a previous calculation of 0.1 percent growth, the Office for National Statistics said today in London. The median forecast in a Bloomberg News survey of 27 economists was for a 0.2 percent increase.
Weaker Dollar
The increase in prices accelerated as the dollar dropped against the euro. A weaker U.S. currency bolsters the appeal of raw materials as an alternative investment. The greenback traded at $1.3618 per euro, down 0.5 percent from $1.3548 yesterday.
The Reuters/Jefferies CRB Index of 19 commodities climbed 1.4 percent to 274.77. Gold futures for April delivery rose $10.40, or 0.9 percent, to settle at $1,118.90 an ounce on the Comex division of the Nymex.
?Oil has recovered because of the first signs of economic growth,? said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. ?Stocks in floating storage have been diminishing.?
The number of tankers used as floating storage for crude oil and diesel fell 20 percent in January, according to a Feb. 8 report from Simpson, Spence & Young Ltd., the world?s second- largest shipbroker.
JPMorgan Chase & Co. raised its 2010 forecast for crude oil traded in New York by 6.7 percent, partly because of reduced inventories in floating storage.
Oil Forecast
West Texas Intermediate crude oil will average $83.50 a barrel this year, JPMorgan said yesterday. That?s up from a previous forecast of $78.25. JPMorgan also increased its outlook for global oil demand by 110,000 barrels a day to 86.3 million barrels a day. The International Energy Agency on Feb. 11 raised its forecast for oil demand in 2010.
The Organization of Petroleum Exporting Countries increased crude-oil production by 125,000 barrels a day, or 0.4 percent, to an average 29.17 million barrels a day in February, the highest level since December 2008, a Bloomberg News survey showed. Saudi Arabia led the gain, with output rising 100,000 barrels a day to 8.25 million.
Brent crude for April settlement rose $1.30, or 1.7 percent, to end the session at $77.59 a barrel on the London-based ICE Futures Europe exchange.
Oil in New York fell 2.3 percent yesterday after the number of Americans filing first-time claims for unemployment benefits unexpectedly gained in the week ended Feb. 20, and durable goods orders excluding transportation dropped in January.
?This move higher shouldn?t be a surprise because we?ve come off a great deal,? said Michael Fitzpatrick, vice president of energy at MF Global in New York. ?We aren?t trading in any new territory.?
Oil volume on the Nymex was 525,694 contracts as of 3:15 p.m. in New York. Volume totaled 510,779 contracts yesterday, 14 percent lower the average of the past three months. Open interest was 1.28 million contracts.
To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net
Last Updated: February 26, 2010 16:27 EST
http://www.bloombergnews.com/apps/news?pid=20601087&sid=akSe6d86LDqY&pos=4