FX:Crude oil climbs on euro zone optimism, weak greenback
Forexpros - Crude oil futures were higher during European afternoon trade on Friday, as news of an agreement to ease conditions on emergency loans for Spanish banks and possible help for Italy boosted market sentiment.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD79.48 a barrel during European afternoon trade, climbing 2.30%.
The August contract traded in between a tight range of USD79.95 a barrel, the daily high and a session low of USD78.28 a barrel. Prices hit a one-week high of USD80.84 on Wednesday.
Oil futures rallied 1.1% on Wednesday after a report by the National Association of Realtors showed that pending home sales jumped 5.9% in May, blowing past expectations for a 1% increase, to match a two-year high hit in March.
Another report showed that U.S. durable goods orders rose by a seasonally adjusted 1.1% in May, beating expectations for a 0.4% increase, indicating that the manufacturing sector is stabilizing following a 0.2% drop in May.
Meanwhile, the U.S. Energy Department said in its weekly report that crude oil inventories declined by 0.1 million barrels last week to a total of 387.2 million barrels, just below the highest level since July 1990.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Investors remained cautious however, as European Union leaders pursued talks in Brussels for the second consecutive day and as more steps were needed in order to tackle the region's financial crisis in the long run.
Earlier in the day, euro zone leaders said they had agreed that the region's rescue funds could be used to stabilise bond markets without forcing countries that comply with EU budget rules to adopt extra austerity measures or economic reforms.
The leaders also agreed that the bloc's future permanent bailout fund, the European Stability Mechanism (ESM), would be able to lend directly to recapitalize banks without increasing a country's budget deficit.
Euro zone officials added that they would speed up plans to create a single supervisor to oversee the euro zone's banks by the end of 2012.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery advanced 3.31% to trade at 93.52 a barrel, with the spread between the Brent and crude contracts standing at USD14.04.
Prices fell to as low as USD88.49 a barrel on June 22, which was the lowest since December 20, 2010.
Bloomberg reported earlier that prices may also advance after the EU's ban on the purchase, transport, financing and insurance of Iranian crude starts on July 1.
