By Claudia Assis and Steve Gelsi, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures turned higher Monday, gaining some support from a weaker dollar and news that the U.S. manufacturing sector expanded in April, albeit at a slower pace than the previous month.
Oil had started the session lower as some traders judged that the death of Osama bin Laden after a U.S. raid in Pakistan would skim some of the risk premium off oil prices.
Crude for June delivery CLM11 +0.27% added 49 cents, or 0.4%, to $114.38 a barrel on the New York Mercantile Exchange. Oil closed out last week at its highest level since September 2008.
Brent crude for June also turned higher, up 17 cents, or 0.1%, to $126.06 on ICE Futures in London.
The death of bin Laden had created “expectation that the risk of terror will decline and the risk premium on the price of oil could also drop as a result,” analysts at Commerzbank said in a note to clients Monday.
Meanwhile, the reportedly death of one of Libyan leader Col. Moammar Gadhafi’s sons in a NATO air strike over the weekend has boosted hopes of a swifter end to the fighting in Libya and normalization of oil production sooner, the analysts said.
“We do not believe these hopes are realistic, though, and the fall in price should be short-lived,” they added.
Commodity prices had also dropped as the U.S. dollar had advanced after the news. At last check, however, the dollar index DXY -0.20% , which measures the greenback against a basket of six major currencies, moved lower, to stand at 72.795 from 72.960 in late North American action on Friday.
Other energy products reverted higher with crude. Gasoline for June delivery RBM11 +0.06% advanced less than 1 cent to $3.40 a gallon. June heating oil HOM11 +0.09% also added less than 1 cent to $3.28 a gallon.
Analysts at Houston-based energy research firm Tudor Pickering Holt said the “first reaction by the market is relief” that the man who directed the Sept. 11, 2001, terror attacks that killed thousands, mostly at the site of the former World Trade Center, was dead. See more on U.S. raid in Pakistan in which bin Laden died.
While bin Laden’s al Qaeda organization “still exists and future strikes remain a risk … reality is al Qaeda has not focused on oil supply/transportation targets over the past decade, so [we] don’t think bin Laden’s death should have significant impact on crude (up or down),” the Houston-based energy research firm said in a comment to clients.
On Friday, crude futures rose to their highest level since 2008 to end the regular trading session on the New York Mercantile Exchange at $113.93 a barrel. See more on energy futures trading to close out April.
