BLBG: Oil Rises as Weak Dollar, Takeovers Bolster Investor Demand
July 19 (Bloomberg) -- Crude oil climbed for the first time in four days as the dollar dropped against the euro, bolstering investor appetite for energy futures.
Oil rose as much as 2.2 percent as the greenback fell after builders in the U.S. turned more pessimistic than forecast. The National Association of Home Builders/Wells Fargo confidence index dropped to 14 this month, the lowest level since April 2009, from 16 in June. September futures have about twice the volume today as the August contract that will expire tomorrow.
“The major driver is the fund money, which is coming back in droves,” said Carl Larry, president of Oil Outlooks and Opinions LLC in Houston. “You can tell because all of the activity is in different months.”
Crude oil for August delivery rose $1.05, or 1.4 percent, to $77.06 a barrel at 11:04 a.m. on the New York Mercantile Exchange. The more active September futures increased $1.16, or 1.5 percent, to $77.54 a barrel.
“September crude is where all the volume is today, while there’s very little in August,” Larry said. “People want to buy into crude, they want to be long.”
The dollar declined to $1.2971 per euro, down 0.3 percent from $1.293 on July 16.
Greater Net-Long Position
Hedge funds and other large speculators increased their net-long position in New York crude-oil futures in the week ended July 13, the most since February 2007, according to U.S. Commodity Futures Trading Commission data.
Net-long positions among hedge funds and other large speculators in crude oil futures and options combined on the Nymex rose to 84,455 for the seven days ended July 13, according to the CFTC data.
“Investors are following broader signals to get a handle on the future demand outlook,” said Chris Barber, a senior analyst at Energy Security Analysis Inc. in Wakefield, Massachusetts.
Brent crude oil for September settlement climbed 93 cents, or 1.2 percent, to $76.30 a barrel on the London-based ICE Futures Europe exchange.
--With assistance from Asjylyn Loder in New York. Editors: Richard Stubbe, Charlotte Porter.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.
