MW: Oil futures gain as investors anticipate earnings relief
By Kate Gibson and Catherine Carlock, MarketWatch
NEW YORK (MarketWatch) -- Oil prices edged higher Monday as investors saw signs of further economic recovery in the latest earnings reports, but trimmed earlier gains as U.S. equities faltered.
Benchmark crude for August delivery added 51 cents, or 0.7%, to $76.52 a barrel, after touching $77.73 earlier. On Friday, the contract fell 61 cents to settle at $76.01 for a weekly loss of 1%. Read about oil prices on Friday.
"Oil prices recently have been trading alongside equity markets, and of course equity markets are a barometer of business sentiment for earnings in the United States," said Patricia Mohr, economic and commodity market specialist at Scotiabank Group in Toronto.
Several U.S. companies reported results Monday that beat analysts' forecasts for the bottom line.
Halliburton Co. (HAL 28.80, +1.29, +4.69%) said its second-quarter earnings climbed 83%, with earnings per share surpassing expectations, though the oilfield-services company warned that a ban on deepwater drilling in the Gulf of Mexico would likely dent 2010 results. Read about Halliburton's results.
The company, which did cement work on the BP PLC (BP 35.12, -1.98, -5.34%) well that burst in the Gulf three months ago, also said it is indemnified under its contract with BP.
Hasbro (HAS 38.99, -0.51, -1.29%) and Delta Air Lines (DAL 10.99, -0.73, -6.23%) also reported better-than-forecast operating profits Monday, though Hasbro missed sales forecasts.
"People, I think, are really more optimistic about the economic outlook this week than they were last [week]," said Peter Buchanan, senior economist at CIBC World Markets.
"I think that's helping oil at this point."
A slew of companies will report quarterly results this week, including International Business Machines Corp. (IBM 129.21, +1.18, +0.92%) after Monday's close.
Limiting oil's gains, U.S. stocks briefly turned lower and remained off the day's highs after a report showed the National Association of Home Builders/Wells Fargo housing market index fell to 14 in July from a downwardly revised 16 in June. It was the first report of the week expected to show weakness in the housing sector. See more on housing data.
The S&P 500 (SPX 1,065, -0.01, -.00%) was recently down less than 1 point at 1,065, while the Dow Jones Industrial Average (DJIA 10,110, +11.73, +0.12%) was up 9 points at 10,107.
