Weakness in the US dollar and positive economic data (from the US and Europe) bolsters optimism about economic rebound

October crude futures advanced 6.2% this week

Oil prices touched a 10-month high on Friday in New York, buoyed by weakness in the dollar and by positive economic data. On the other hand, natural-gas futures fell sharply to end at a fresh seven-year low, pressured by a glut in supplies.

Crude oil for October delivery increased 98 cents to US$73.89 per barrel at 2:50 p.m. on the New York Mercantile Exchange, the highest settlement since Oct. 20. October crude futures advanced 6.2% this week. Oil prices are up 66% this year.

Brent crude oil for October settlement rose 86 cents, or 1.2%, to end the session at US$74.19 a barrel on the London-based ICE Futures Europe exchange.

Crude oil futures climbed after US existing home sales increased more than forecast and a closely watched gauge of economic activity across the 16-nation euro-zone’s private sector registered a record jump.

Purchases of existing homes climbed 7.2% to a 5.24 million annual rate, the most since August 2007, the National Association of Realtors said in Washington. The gain was the biggest since records began in 1999.

The preliminary Markit composite purchasing managers’ index (PMI) for the eurozone rose to a 15-month high of 50 in August from 47 in July. The record monthly jump exceeded economists’ expectations for an increase to 48.3.

An index of the German services industry rose to 54.1 this month from 48.1 in July, Markit Economics said, citing its purchasing managers’ survey. The French manufacturing index increased to 50.2 in August from 48.1 in the prior month. A reading above 50 indicates growth.

Economists forecast both indexes would remain below 50.

The US dollar fell against the euro and other major currencies following upbeat economic data from Europe and the US.

The dollar index, which tracks the greenback against a trade-weighted basked of six major currencies, stood at 78.020, down from 78.330 late on Thursday. Weakness in the US currency boosts dollar-denominated commodities such as oil and gold, because it makes them cheaper for holders of other currencies.

source: Indiainfoline

Tags: buy sell hold oil stocks, Crude oil high, Crude oil rate

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