BLBG: Oil Rises After Reports Signal That U.S. Recession Is Easing
June 18 (Bloomberg) -- Crude oil rose after reports signaled that the U.S. economy will rebound later this year, prompting an increase in energy demand.
Oil rebounded after a report showed manufacturing in the Philadelphia region contracted in June at the slowest pace in nine months. The index of U.S. leading economic indicators rose in May and the number of Americans receiving claims for unemployment benefits dropped for the first time since January, according to separate reports.
Crude oil for July delivery rose 57 cents, or 0.8 percent, to $71.60 a barrel at 10:15 a.m. on the New York Mercantile Exchange. Futures dropped as much as 81 cents, or 1.1 percent, earlier today. Prices are up 61 percent this year and reached a seven-month high of $73.23 on June 11.
The Federal Reserve Bank of Philadelphia’s general economic index climbed to minus 2.2 from minus 22.6 in May, the bank said today. Negative numbers signal contraction. The index of leading economic indicators gained 1.2 percent in May, more than forecast, following a 1.1 increase in April, the New York-based Conference Board reported today.
Brent crude for August settlement increased 38 cents, or 0.5 percent, to $71.23 a barrel on London’s ICE Futures Europe exchange.
Oil prices may decline in the next two months because there are no signs that world demand is recovering, according to Frederic Lasserre, Societe Generale SA’s Paris-based head of commodities research.
“Down the road, it is likely that we see a sharp downward correction in the market because recent rallies look very fragile,” Lasserre told reporters today in Tokyo. “If we don’t get some clear and concrete visible signs that the economy is recovering, we might see some profit-taking in the market by some funds in the next two or three months.”
