By Virginia Harrison, MarketWatch
SYDNEY(MarketWatch) — Benchmark crude-oil futures rose Tuesday along with the commodities market as optimism about the American economy extended the upward trend of last week.
Crude for August delivery CL1Q +1.31% went up $1.44, or 1.5%, to $96.36 a barrel.
Oil prices tend to trade inversely to the dollar index DXY +0.22% , which measures the greenback against six major currencies, but a general optimism about the U.S. economy lifted both, said Michael Lynch, president of Strategic Energy & Economic Research.
“Fears of a double-dip recession seem to be fading,” he added.
Earlier in the session, oil dipped as low as $94.34 a barrel. Oil prices have lost more than 5% in the past month, with the decision by the IEA to release 60 million barrels to offset Libyan supply shortages among the factors dampening investment enthusiasm.
The U.S. Department of Energy said last week that it had received more than 90 bids for the 30.2 million barrels it is scheduled to release under the IEA plan and expects the contract process to be completed by July 11.
“In the coming week, we are monitoring the progress of IEA stock release. There are some concerns there is a lack of coordination and transparency outside the U.S., and the 60 million barrels that the IEA decided to release may not be absorbed by the market, due to the weak recovery,” Chung said.
“There are concerns the [release] may create an oversupply situation in the market,” he said.
