Crude oil rose, rebounding from the biggest weekly decline since 2008, on signals that the global economic recovery remains intact. Futures climbed as much as 3.6 percent, snapping a five-day losing streak, after a report today showed German exports surged to a record in March and the U.S. Labor Department said last week that payrolls expanded. Oil retreated and the dollar rebounded from the day’s lows after Greece’s credit rating was cut two levels to B from BB- by Standard & Poor’s. “The good German export numbers gave the market a boost,” said Gene McGillian, a broker and analyst with Tradition Energy in Stamford, Connecticut. “The market broke through $100 earlier but has pulled back a bit after the Greek downgrade.” Crude oil for June delivery rose $2.14, or 2.2 percent, to $99.32 a barrel at 9:31 a.m. on the New York Mercantile Exchange. Futures dropped 15 percent in the five days ended May 6, the biggest weekly decline since December 2008. Prices are up 32 percent from a year ago. Brent crude for June settlement increased $2.61, or 2.4 percent, to $111.74 a barrel on the London-based ICE Futures Europe exchange. German exports, adjusted for work days and seasonal changes, jumped 7.3 percent from February, when they gained 2.8 percent, the Federal Statistics Office in Wiesbaden said. Economists had forecast a 1.1 percent increase, according to the median of 10 estimates in a Bloomberg News survey. Exports were worth 98.3 billion euros ($141.4 billion) in March, the most since records began in 1950, the statistics office said. U.S. payrolls expanded by 244,000 last month, the biggest gain since May 2010, after a revised 221,000 increase the prior month, the Labor Department said May 6 in Washington. Dollar Move The dollar was little changed against the euro after dropping as much as 0.9 percent to $1.4442 earlier today. A decline in the greenback makes commodities priced in the U.S. currency more attractive for investors. “You’re seeing some bottom-fishing today as confidence returns to the commodity markets,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc. in New York. JPMorgan Chase & Co. raised its oil-price forecasts because OPEC and other producers aren’t matching rising demand and consumers will take time to react to higher prices. The bank boosted its 2011 Brent crude forecast to $120 a barrel from $110, and changed its estimate for West Texas Intermediate crude, the grade traded in New York, to $109.50 from $99. ‘Financial Bushfires’ “While financial bushfires or perhaps a rapid resolution to the Libyan civil war could radically alter market dynamics, the balance of both risks and fundamentals still points to a supply constrained world,” JPMorgan analysts led by New York- based Lawrence Eagles wrote in a report on May 6. Hedge funds were caught with bullish bets near record highs last week as oil in New York plunged. Large speculators reduced net-long positions by 2.4 percent to 293,823 futures and options in the seven days to May 3, according to the U.S. Commodity Futures Trading Commission’s weekly Commitments of Traders report. That’s still within 5.7 percent of a record reached in March. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

Source