GT:Oil prices rise on Egypt violence, eurozone optimism
Oil rose in thin holiday trade yesterday as fresh protests in Egypt once again stoked supply concerns, with additional support coming from optimism about talks of releasing aid to Greece.
Prices moved higher as US equity markets got a boost from hopes companies would get a boost from strong consumer buying on Black Friday, the start of the holiday shopping season.
After hostilities between Israel and Palestinians bolstered prices earlier in the week, traders were closely watching violence erupting in Egypt stirred by a decree by President Mohamed Mursi that put his decisions above legal challenge.
Protesters accused him of launching a “coup,” while oil traders were once again on watch for any potential spillover that could impact Middle East oil supplies.
Markets also found support after Greece said the IMF had relaxed its debt-cutting target for the country, suggesting lenders were closer to a deal for a vital aid tranche to be paid. Worries about the eurozone crisis — and the impact on struggling fuel demand — have weighed on crude prices throughout the year.
Brent crude futures traded up 51¢ to $111.06 a barrel by 1706 GMT.
US crude gained 83¢ to trade at $88.21 a barrel, after briefly finding some extra support from news of a spill on Enbridge’s 318,000bpd Line 14 near Mokena, Illinois.
The company later said the line had been briefly shut down on Tuesday, but it had been restarted later in the day.
Gold meanwhile rose above $1,750 an ounce for the first time in more than a month yesterday, gaining 1.3% as dollar weakness and options-related buying triggered a technical breakout.
After trading slightly higher in early US dealings, gold surged suddenly to above its 50-day moving average, a key technical resistance the metal had failed to breach in more than a month.
Analysts said yesterday’s gains could set up for a rally above the more formidable $1,800 level, which bullion has not seen since its rise to a record $1,920.30 in September 2011.
Bullion also benefited from the dollar falling 1% due to the euro’s strength on hopes for a Greek aid package and to a surprise improvement in German business sentiment.
Spot gold was up 1.3% at $1,751.84 an ounce by 1724 GMT.
US Comex gold futures for December delivery were up $23.90 an ounce at $1,752.10 in heavy trading. The first-notice day for December is next Friday.
Strong buying related to next Tuesday’s expiration of the popular December Comex options also lifted gold.
