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| Crude set for biggest increase since May |
| Bloomberg / Apr 01, 2009, 00:38 IST |
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Crude oil rose, heading for its biggest monthly gain in almost a year, as equities increased and a weaker dollar enhanced the appeal of commodities.
Oil climbed as much as 3.2 per cent after European stocks rebounded from the largest drop in four weeks and US futures advanced. Energy, metal and grain prices gained today as the US currency’s drop made dollar-denominated goods more attractive to buyers.
“The fundamentals of the oil market have been shoved to the background as we focus on the stock and currency markets,” said Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois, energy consultant. “Oil is trailing the equity market and has been moving in the opposite direction of the dollar.”
Crude oil for May delivery rose $1.26, or 2.6 per cent, to $49.67 a barrel on the New York Mercantile Exchange. Oil has gained 11 per cent this quarter after tumbling 56 per cent in the previous three months.
This month’s 11 per cent increase was the biggest since the 12 per cent jump in May 2008.
Yesterday, oil futures dropped $3.97 to $48.41 a barrel, the lowest settlement price since March 18 and the biggest decline since March 2, after President Barack Obama said General Motors Corp. and Chrysler LLC have one last chance to “fundamentally restructure.”
“Yesterday’s move was a little excessive,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The automobile industry news was an indication of the dire state of the US economy.”
Brent crude oil for May settlement increased $1.50, or 3.1 per cent, to $49.49 a barrel on London’s ICE Futures Europe exchange.
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