By Myra P. Saefong and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil prices topped $92 a barrel Tuesday, finding support from a rally in global stock markets and a report of progress in stimulus plans for China amid persistent worries about Iran’s nuclear standoff with the West.
Oil for July delivery CLN2 +1.38% rose $1.14, or 1.2%, to $92 a barrel on the New York Mercantile Exchange after trading as high as $92.21. Prices finished Friday with a 0.7% loss for the week, marking a fourth straight week of declines.
Oil futures extended gains from Monday — when electronic trading was light due to a U.S. holiday — made after polls indicated support for a pro-austerity government in Greece. Regular trading on Nymex was closed for the holiday. Read more on Monday's oil market action.
“The petroleum markets are working back to upside on a moderate volume of ‘risk on’ trade flow led by a firmer S&P 500, despite Conference Board consumer confidence numbers that were a clear disappointment,” said Tim Evans, energy analyst at Citi Futures Perspective. “It is clear that investors spent the long U.S. holiday weekend thinking that recent price weakness represented a buying opportunity.”
The consumer-confidence index fell to 64.9 in May — the lowest level since January — from a revised 68.7 in April. A prior estimate for April pegged the level at 69.2, according to the Conference Board. Economists polled by MarketWatch had expected a reading of 70 for May. Read about consumer confidence.
Meanwhile, China’s State Council, or cabinet, on Tuesday approved an expansion of a value-added-tax reform to include Beijing, according to report by Dow Jones Newswires, which cited a person with knowledge of the matter.
“As oil in recent weeks gave into the weight of overwhelming supply, it now will find support from rising risk,” said Phil Flynn, a vice president at PFG Best, in a note.
“A massacre in Syria and the perception that Iranian nuclear talks will fail has added a risk dynamic that has been absent in recent weeks,” he said. “Add to that talk China may act to stimulate its slowing economy and the pro-austerity party in Greece is leading in the polls [ahead of elections in June]. It seems that recent dramatic drop in oil has come to an end.”
Western nations have stepped up sanctions on Iran, and Iran on Tuesday warned that pressuring Tehran with sanctions amid nuclear discussions could hurt the chances of reaching an agreement, according to a Reuters report Tuesday. Iran concluded talks with world powers last week that are set to resume in June.
Petroleum products followed gold higher Tuesday, with June gasoline RBM2 +1.67% leading the pack, tacking on 3 cents, or 1.2%, to $2.92 a gallon. June heating oil HOM2 +0.83% rose 2 cents, or 0.6%, to $2.85 a gallon.
But natural gas for June delivery NGM12 -4.65% traded at $2.52 per million British thermal units, down 5 cents, or 1.9%. It’s still up about 10% month-to-date. Read about the summer prospects for natural gas.
Myra Saefong is a MarketWatch reporter based in San Francisco.
Sarah Turner is MarketWatch's bureau chief in Sydney.
