BLBG: Crude Oil Rebounds From Five-Week Low as Stock Market Advances
Oil rebounded from a five-week low in New York as U.S. stocks increased after Treasury Secretary Timothy Geithner said the “vast majority” of the nation’s banks have more capital than needed.
Crude prices gained as much as 1.1 percent as financial share led U.S. equities higher. Energy prices also increased as the euro gained against the dollar, bolstering the appeal of commodities as an alternative investment. The May contract, which expires today, is less expensive than for the following months, allowing buyers to profit from storing oil.
“Both the May and June contracts were pretty oversold, so were ready to consolidate,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “The equity markets are higher and the dollar is giving back some of its recent gains. None of this is particularly germane to the oil business but its giving the market a lift.”
Crude oil for May delivery rose 32 cents, or 0.7 percent, to $46.20 a barrel at 12:05 p.m. on the New York Mercantile Exchange. Prices declined as much as $2.05, or 4.5 percent, to $43.83, the lowest since March 16. The more-active June futures contract increased 25 cents, or 0.5 percent, to $48.76.
Yesterday, crude futures fell $4.45, or 8.8 percent, to $45.88 a barrel, the biggest drop since March 2, as the stock market tumbled and the dollar surged against the euro.
The Standard & Poor’s 500 Index rose 1.2 percent to 842.27 after dropping as much as 0.7 percent earlier. The Dow Jones Industrial Average increased 0.9 percent to 7,913.81.
Brent crude oil for June settlement increased 30 cents, or 0.6 percent, to $50.16 a barrel on London’s ICE Futures Europe exchange.
