Aug. 21, 2012, 12:28 p.m. EDT
Oil pushes past $97 on euro-zone hopes
Crude hovers at best levels since early May
By Claudia Assis and Michael Kitchen, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude futures rose Tuesday on optimism about the euro zone and expectations that the European Central Bank will step up efforts to help countries in the region’s periphery.
Oil for September delivery (NMN:CLU2) rose $1.25, or 1.3%, to $97.22 a barrel on the New York Mercantile Exchange, more than undoing its 4-cent loss during the regular session on Monday. Read more on Monday’s oil trades.
A close around these levels would be the barrel’s highest since early May.
Investors are more optimistic about prospects for the euro zone “and leaning toward the thought that something will be done there,” said Michael Lynch, president of Strategic Energy & Economic Research. “It looks like something will happen and things are less likely to fall apart.”
U.S. stocks also saw early gains, helping oil along the way. Equities are seen as a proxy for the economic climate and higher equities are thought to be an indicator of more demand for crude. See more about U.S. stocks.
The hopes for the euro zone also added to expectations of more demand for oil should a speedier recovery materialize for the euro zone. They also pushed the euro higher, keeping the dollar under pressure and benefiting oil and other commodities.
The ICE dollar index (NYE:DXY) retreated to 81.888 from 82.475 in late Monday in North American trading.
