| GEO Business | | Oil prices rebound on equity surge | Updated at: 0303 PST, Friday, July 31, 2009
NEW YORK: Oil prices roared higher Thursday, rebounding from a plunge the prior day as the market gained support from a Wall Street equity rally and a weaker dollar.
New York's main contract, light sweet crude for September, vaulted 3.57 dollars to close at 66.92 dollars a barrel.
In London, Brent North Sea crude for September delivery leapt 3.58 dollars to settle at 70.11 dollars a barrel.
The New York futures contract "regained most of the losses from yesterday," said independent trader Ellis Eckland, referring to Wednesday's tumble on heightened concerns about slack demand.
On Thursday, the contract had "really been supported by the equity market, which is up very strongly, and by a weaker dollar," Eckland said.
With US stock indices climbing to their highest peaks since November, oil traders caught the wave of optimism that the worst of the long US recession may be soon over.
Dollar-priced commodities also got a lift from a weaker dollar, which makes them cheaper for buyers using stronger currencies.
However, Eckland cautioned, the rising US oil inventories could exert pressure on the market soon.
"There is a bad inventory situation and people are concerned about the next few months because demand turns down in the fall," he said.
Phil Flynn, an analyst at PFG Best Research, said the US Department of Energy's latest weekly oil reserves report Wednesday revealed an "an incredible surge in supply and a disturbing trend of weakness in demand."
Crude oil prices also benefited Thursday from improved economic data for the eurozone and Japan. |  |
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