Energy Services
Client Login

01924 267406
Connect with us Follow us on Twitter Call us
Blog Header
Save Money


Save Time


More Information

Clear Analysis

More Control


  • May 13th, 2011

Oil Gains Near $100 As Dollar Falls

Oil rose about $1 on Friday, taking benchmark U.S. crude futures back near $100 per barrel, after much higher-than-expected growth in Germany and France and a rebound in the euro against the dollar.

Energy markets have been on a roller-coaster ride over the last week as investors have reassessed the outlook for global growth and the risk of supply disruptions in the Middle East.

Strong growth data from the euro zone on Friday encouraged investors to move back into oil, which has tumbled more than $20 over the last week but recouped some of those losses.

The growth figures helped boost the euro and depressed the dollar, which often moves inversely to oil because many forms of energy are priced in the U.S. currency on international spot markets.

U.S. light, sweet crude for June was last near $100 a barrel. The contract has traded between $94.63 and $114.83 over the last two weeks with huge volatility each day.

Brent crude last traded near $114 a barrel.

“Very healthy numbers out of the euro zone this morning are supporting oil and have pushed the euro (up) against the dollar,” said Robert Montefusco, broker at Sucden Financial.

The dollar index, which measures the U.S. currency against a basket of currencies, fell around 0.15 percent, after hitting a three-week peak on Thursday.

Analysts expect oil to see more volatility in the next few weeks, driven partly by the dollar due to uncertainty surrounding growth in the U.S. and European economies.

Close-to-close volatility for Brent and U.S. crude has rocketed to well over 60 percent after two years of declining.

Big rises in the German and French economies pushed growth in the euro zone well above forecasts in the first quarter, highlighting the gap between the bloc’s strong and weak.

The 17-nation currency area expanded by 0.8 percent in the first three months of the year, data showed, fuelled by 1.5 percent GDP growth in Germany, while the French economy grew 1.0 percent, driven in part by consumer demand.

Economists had forecast euro zone growth of 0.6 percent. The data was better than expected despite Portugal returning to recession and Greece still buried under a debt mountain. Germany and France account for nearly half the region’s output.

Investors have been concerned that China’s battle with inflation may start to trim demand from the world’s second-largest oil consumer.

China’s central bank raised reserve requirements for commercial banks by another 50 basis points on Thursday as it pursued a campaign to fight inflation despite initial signs of a slowing economy.

The International Energy Agency has trimmed its global oil demand growth estimates for this year by 1.5 percent to 1.29 million barrels per day.

“There are concerns China might be tightening too much, that demand might be falling and high prices might be starting to affect demand,” said Tony Nunan, a risk manager with Mitsubishi Corp. in Tokyo.



All Categories

News Archive