MW: Oil futures extend gains in electronic trading
By Sarah Turner and Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Crude-oil futures rose more than 1% in electronic trading Monday, after weekend killings in a Syrian government attack raised the temperature in the Middle East and the dollar traded lower.
Oil for July delivery CLN2 +0.60% rose 99 cents, or 1.1%, to $91.85 a barrel in electronic trading on the New York Mercantile Exchange.
Friday also saw some gains for oil, after signs of some progress on creating euro-area bonds and a lack of resolution in talks between Iran and world powers over Tehran’s nuclear program. Read more on Friday's oil market action.
Attention switched to Syria over the weekend, however, after an alleged government attack on the town on Houla killed at least 109, according to reports. Read more on Syria.
The United Nations Security Council met on Sunday to discuss unfolding developments that brought a six week cease-fire to an end. UN condemns Syrian attack.
With U.S. markets closed Monday for the Memorial Day holiday, energy analysts at Citi noted that trading volumes were light on Friday with “traders seemingly reluctant to take on fresh positions.”
Still, noting the “protracted” fall in oil since early March, due in part to a robust U.S. dollar, David Morrison, senior market strategist at GFT Markets, commented that “there are signs that crude is now oversold and traders are looking out for a trigger to buy.”
At the same time, the ICE dollar index DXY -0.23% , which measures the greenback against a basket of six currencies, fell back to 81.98 on Monday from 82.416 on Friday, when it reached its highest level since 2010. Commodities traded in the U.S. currency tend to rise on a weaker dollar, as they get cheaper for investors holding other currencies.
Investors also moved slightly back into the euro and other riskier assets, such as equities and oil, as polls in Greece over the weekend showed support for the pro bailout New Democracy party.
Fears that anti-austerity Syriza party would get the ability to form a government recently fueled fears that Greece would exit the euro zone, leaving European markets beaten down.
Elsewhere in the energy complex, most futures were on the rise. Heating oil HON2 +0.35% HOM2 +0.32% took on 0.6% to $2.85 a gallon, while gasoline RBN2 +0.89% RBM2 +1.11% rose 0.8% to $2.86 a gallon.
Sarah Turner is MarketWatch's bureau chief in Sydney.
Sara Sjolin is a MarketWatch reporter, based in London.
