(DIG/DUG/USO): Crude Oil Surges Most in Four Months as Dollar Declines Against the Euro
By Mark Shenk
Feb. 16 (Bloomberg) -- Crude oil rose the most in more than four months as the dollar declined against the euro, bolstering the appeal of commodities as an alternative investment.
Oil climbed as much as 4.3 percent as the euro rebounded from the lowest level against the dollar in nine months yesterday. European finance ministers turned up the pressure on Greece to put its public finances in order and refused to say how they would make good on a promise to rescue the nation if it can’t contain its debt.
“Commodities are moving as a group today,” said Phil Flynn, vice president of research at PFGBest in Chicago. “We’re looking at the usual suspects, the dollar and the euro. The markets are optimistic today that Europe will be able to bolster Greece and some other debt-ridden countries that use the euro.”
Crude oil for March delivery rose $3, or 4.1 percent, to $77.13 a barrel at 11:19 a.m. on the New York Mercantile Exchange. Futures touched $77.28, the highest since Feb. 3. Prices have more than doubled from a year earlier. It was the biggest percentage gain since Sept. 30.
There was no floor trading in New York yesterday because of the Presidents Day holiday. Yesterday’s electronic trades and today’s session will count toward today’s settlement.
The dollar traded at $1.3725 per euro, down 0.9 percent from $1.3598 yesterday. The common currency has weakened 4.2 percent against the greenback since the start of the year, partly because of concern over the euro zone’s stability in the face of large debts among member nations.
Finance ministers from the 16 nations that use the common currency told Greek authorities to prepare more deficit measures by March 16, in case the government fails to show sufficient progress reining in the region’s largest budget deficit.
The Reuters/Jefferies CRB Index of 19 commodities gained 2.4 percent to 274.47.
New York Manufacturing
Commodities and equities also climbed after manufacturing in the New York region grew at the fastest pace in four months as companies boosted payrolls in anticipation of accelerating orders and sales. The Federal Reserve Bank of New York’s general economic index rose to 24.9 this month, higher than anticipated, from 15.9 in January.
“The manufacturing numbers suggest that people will be restocking, which is always good for commodities,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.
Japanese gross domestic product rose at an annual 4.6 percent pace in the three months ended Dec. 31 after failing to expand in the previous quarter, the country’s Cabinet Office said yesterday. Japan is the third biggest oil consumer after the U.S. and China.
Brent crude for April delivery increased $3.43, or 4.7 percent, to $75.94 a barrel on the London-based ICE Futures Europe exchange. Futures reached $76, the highest since Feb. 3.
To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net
Last Updated: February 16, 2010 11:29 EST
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