BLBG: Oil Rises to Two-Week High Above $86 on Weaker Dollar, Recovery
By Grant Smith
April 30 (Bloomberg) -- Crude oil rose above $86 a barrel in New York for the first time in two weeks as the weaker dollar spurred hedging demand and economic data bolstered confidence in the recovery.
Oil rose for a third day before a report that may show the U.S. economy grew at a 3.3 percent annual pace in the first quarter. Energy Department data this week had the country’s refineries operating at the highest rate in almost two years. A European Commission report showed yesterday a gauge of executive and consumer sentiment in the euro-area rose this month even as Greece’s fiscal crisis sent ripples across the region.
“Optimism is still there even though it’s been tested this week by Greece,” said Thina Saltvedt, a commodities analyst at Nordea Bank AB in Oslo. “Macro figures have been better-than- expected, and the oil data in the U.S. is adding to the optimism. I wouldn’t be surprised to see $90 before very long if the eurozone calms down.”
Crude oil for June delivery rose as much as 96 cents, or 1.1 percent, to $86.13 a barrel, the highest since April 15. It was at $85.65 in electronic trading on the New York Mercantile Exchange at 10:39 a.m. London time. Brent crude for June settlement was up 62 cents at $87.52 on the London-based ICE Futures Europe exchange.
Futures, up more than 8 percent so far this year, are set to climb 2.5 percent in April for a third straight monthly gain.
The dollar slipped to $1.3316 per euro as of 10:04 a.m. London time from $1.3234 in New York last night. The euro strengthened for a third day versus the dollar after European Commission President Jose Barroso said he is confident a rescue package for Greece will be completed “in days.”
German Unemployment
Unemployment in Germany, Europe’s biggest economy, declined this month at the fastest pace in more than two years, government data showed yesterday. Jobless claims in the U.S., the world’s largest energy consumer, fell to a one-month low of 448,000 in the week ended April 24, in line with the median forecast from economists surveyed by Bloomberg News.
U.S. Interior Department inspectors began boarding deep- water platforms in the Gulf of Mexico and Louisiana asked for help from the National Guard, as an oil sheen reportedly washed ashore in the worst rig spill in four decades.
The leak, five times bigger than previously estimated, prompted Louisiana Governor Bobby Jindal to declare a state of emergency, and led Senator Bill Nelson, a Florida Democrat, to ask President Barack Obama to indefinitely suspend plans to expand offshore drilling for oil and natural gas.
The U.S. will “use every single available resource at our disposal” in response to the spill, Obama said yesterday. At the current rate oil is spilling from the well, by the third week of June the spill will exceed the volume dumped after the Exxon Valdez ran aground in Alaska’s Prince William Sound in 1989.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
