MW: Oil rebounds from recent losses as dollar’s lower
Natural gas leads Friday percentage gains in higher energy complex
By Claudia Assis and Barbara Kollmeyer, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures rebounded Friday, vying to end the week on a positive note after recent steep declines left prices low enough to attract bargain hunters.
Most commodities traded higher with a weaker dollar providing an extra boost, as U.S. stocks began the Wall Street session with gains.
Crude for November delivery CLX2 +1.22% added $1.02, or 1.1%, to $93.44 a barrel on the New York Mercantile Exchange.
The gain pared oil’s weekly loss to nearly 6%. What’s behind the sharp retreat seen earlier in the week left some traders scratching their heads, though rumors of a strategic supply release as well as comments from Saudi Arabian oil officials and rising inventories are among the factors that have been cited. Read analysis on what's behind oil's recent drop.
Crude futures had been rallying since early August, in part on anticipation that a slowing global economy would prompt central banks to pump more money into the financial system. The Federal Reserve announced its third round of quantitative easing, or QE3, earlier this month to help underpin the U.S. economic recovery, and the Bank of Japan surprised markets earlier this week by unveiling plans for a new asset-buying program.
But Capital Economics strategist Julian Jessop said while that past rounds of QE have boosted commodity prices, any lift from QE3 will likely be “relatively small and short-lived.”
A weaker dollar lent support to oil and other dollar-denominated commodities. The ICE dollar index DXY -0.20% fell to 79.233, off from 79.428 late Thursday.
A softer greenback tends to boost dollar-denominated commodities such as crude, as it makes them cheaper to holders of other currencies.
In other energy trading Friday, gasoline for October delivery RBV2 +1.33% rose 4 cents, or 1.4%, to $2.82 a gallon, while October heating oil HOV2 +0.86% added 3 cents, or 0.9%, to $3.12 a gallon. The contracts expire next week.
Natural gas for October delivery NGV12 +2.86% rallied 8 cents, or 2.7%, to stand at $2.87 per million British thermal units.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Barbara Kollmeyer is an editor for MarketWatch in Madrid. Virginia Harrison in Sydney contributed to this report.
