BLBG: Crude Oil Rises, Set for Biggest Monthly Increase Since May
Oil headed for its biggest monthly gain in almost a year as some traders said yesterday’s 7.6 percent plunge was excessive and a weaker dollar bolstered the appeal of commodities.
Crude was also helped as European stocks rebounded from the largest drop in four weeks amid a recovery in consumer confidence. Oil has risen 10.9 percent this month after U.S. Treasury Secretary Timothy Geithner unveiled a plan to remove toxic assets from banks.
“Prices will stabilize around these levels,” said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. “We have some positive factors this morning reversing yesterday’s slump. The euro-dollar is giving support and equities in Europe are friendly.”
Crude oil for May delivery rose as much as $1.49, or 3.1 percent, to $49.90 a barrel on the New York Mercantile Exchange. The contract traded at $49.70 a barrel at 12:35 a.m. in London.
Crude has gained 11 percent this quarter after tumbling 56 percent in the previous three months. This month’s gain was the biggest since the 12 percent jump in May 2008.
Yesterday, it fell $3.97 to $48.41 a barrel, the lowest settlement on the Nymex since March 18 and the biggest decline since March 2, after President Barack Obama said General Motors Corp. and Chrysler LLC have one last chance to “fundamentally restructure.”
Dollar Drop
The dollar fell against the euro for the first day in four, trading for $1.3330 per euro, from $1.3165 yesterday. A weaker U.S. currency boosts the attraction of dollar-priced assets that can be used to hedge against inflation.
Europe’s Dow Jones Stoxx 600 Index added 2.1 percent to 174.03 at 11:46 a.m. in London, erasing its March decline.
U.S. crude oil stockpiles surged 3.3 million barrels to 356.6 million barrels in the week ended March 20, the highest since July 1993 and 13 percent more than average for this time of year, according to an Energy Department report on March 25. Supplies probably rose 3.5 million barrels last week, according to the median of nine responses in a Bloomberg News survey.
Brent crude oil for May settlement rose as much as $1.70, or 3.5 percent, to $49.69 a barrel on London’s ICE Futures Europe exchange. It was at $49.66 a barrel at 12:36 p.m. London time.
