OIL FUTURES : Crude-Oil Price Bounces Up After Four-Day Slump
09/21/2012| 10:28am US/Eastern
--Oil rises on weak dollar, following stocks higher
--Markets cheer report on possible Spain bailout
--Crude-oil futures recently up $1.16 to $93.58/Bbl
By Jerry A. DiColo
NEW YORK--U.S. crude-oil futures rose Friday, rebounding from four-straight losing sessions as the dollar declined and broader markets pointed higher.
The gains came as the front-month contract switches to November futures. Light, sweet crude oil for November delivery recently traded $1.16, or 1.3%, higher at $93.58 a barrel on the New York Mercantile Exchange.
Brent crude oil on the ICE futures exchange for November delivery traded $1.42 cents higher at $111.45 a barrel.
Oil rose along with stock markets and other commodities such as copper and wheat, pushed by a stronger euro over the U.S. dollar. The Financial Times reported the European Commission and Spain are moving towards reforms that would meet the demand of lenders.
"Bailouts are bullish," said Phil Flynn, an analyst at Price Futures Group in Chicago. He added that the sharp fall in crude-oil prices over the past week likely prompted the rebound as well. "Because of the precipitous price drop, maybe we were too low."
A weaker dollar typically helps raise oil prices by making crude-oil cheaper for buyers using other currencies.
Europe's debt crisis has kept oil traders' attention for months, and aided the latest rally this summer after European Central Bank President Mario Draghi pledged to do whatever it takes to save the euro.
Oil prices have rallied from lows under $80 in June on hopes that Europe's crisis is abating. The Federal Reserve's decision to provide a new round of stimulus also buoyed crude oil's price.
But over the past week, as prices approached $100 a barrel, many investors grew nervous that futures had risen too high, and were set for a decline.
On Wednesday, a report from the U.S. Energy Information Administration said U.S. oil stockpiles rose by 8.5 million barrels last week, well above analysts' estimates. The sharp supply increase prompted many investors to close out bullish bets.
Still, supplies of products such as gasoline and diesel remain tight, keeping prices for the fuels elevated.
Front-month October reformulated gasoline blendstock, or RBOB, recently traded 3.60 cents higher at $2.9400 a gallon. October heating oil recently traded 2.99 cents higher at $3.1274 a gallon.
Write to Jerry A. DiColo at email@example.com.