Tags: Oil | Prices

Oil Rebounds as Stocks Surge, Euro Gains Ground

Thursday, 27 May 2010 01:10 PM

Oil prices rallied for a second straight day Thursday as investors set aside worries for now about the European debt crisis and focused on rising stock markets and improving economic data.

Retail gasoline prices continued to slide, as three weeks of declining oil prices slowly made their way to the pump.

Benchmark crude for July delivery rose $2.84 to $74.35 a barrel on the New York Mercantile Exchange. The contract added $2.76, its biggest gain in eight months, to settle at $71.51 on Wednesday.

Earlier this month crude prices were as high as $87.15 a barrel, before they were dragged down by worries that Europe's debt crisis could undermine the global economic recovery. The battered euro gained some strength against the dollar on Thursday. Oil is priced in dollars, so a stronger dollar makes it less appealing to holders of foreign currencies.

Some analysts think that oil was due to bounce back because it dropped so quickly. "Because the market was beaten down so fast it doesn't take that much to prop it up a little bit," PFGBest analyst Phil Flynn said.

Oil prices benefited as stocks rose on encouraging economic news. The Dow Jones Industrial Average was up about 200 points, or 2 percent, in midday trading. The NASDAQ and the S&P 500 were more than 2 percent higher.

The government said Thursday that the U.S. economy grew at a 3 percent annual rate in the first quarter, albeit slower than initially thought. That came a day after strong reports on factory orders, housing and consumer confidence.

Natural gas prices came off earlier highs after the Energy Information Administration reported that gas in storage is now 17 percent above the five-year average. Prices for the July contract had been as high as $4.30 per 1,000 cubic feet before the report. Prices rose 10.1 cents to $4.28 per 1,000 cubic feet.

Drivers heading out for a Memorial Day weekend trip will enjoy cheaper gasoline prices, as pump prices keep falling. Prices dropped 1.2 cents to a national average of $2.759 per gallon on Thursday, according to AAA, Wright Express and Oil Price Information Service.

Prices have lost 8.1 cents in the past week and 9.9 cents in a month. They are 32.5 cents above year-ago prices.

So far, the spill in the Gulf of Mexico has yet to affect oil and gasoline prices even though it has surpassed the Exxon Valdez spill as the worst in U.S. history. The Coast Guard and BP said the latest attempt to stop crude from gushing out of the seabed seemed to be working.

In other Nymex trading in July contracts, heating oil rose 7.95 cents to $2.0002 a gallon, and gasoline gained $6.82 cents at $2.0386 a gallon.

In London, Brent crude was up $2.95 to $74.69 on the ICE futures exchange.

© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

1Like our page
2Share
Headline
Oil prices rallied for a second straight day Thursday as investors set aside worries for now about the European debt crisis and focused on rising stock markets and improving economic data.Retail gasoline prices continued to slide, as three weeks of declining oil prices...
Oil,Prices
469
2010-10-27
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved