Oil breaks 3-day skid as equities bounce

By Robert Gibbons

NEW YORK (BestGrowthStock) – U.S. oil prices rose on Monday, breaking a string of three losing sessions, advancing with a stock market that was boosted by optimism about quarterly earnings and shrugged off weak homebuilder sentiment.

U.S. crude oil for August delivery on the New York Mercantile Exchange rose 53 cents, or 0.7 percent, to settle at $76.54 a barrel, trading as low as $75.50 and having rallied to an intraday peak of $77.69.

The August crude contract expires on Tuesday.

London ICE Brent crude for September delivery rose 25 cents to settle at $75.62.

“The stronger open on Wall Street appears to have triggered some fund buying,” said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt.

Oil gave back some early gains when U.S. stocks (Read more about the stock market today. ) that were up on news from Halliburton and Boeing pared their rise when the National Association of Home Builders said its home-builder sentiment index in July fell more than expected.

U.S. stocks (Read more about the stock market today. ) ended higher on Monday on optimism over forthcoming technology earnings and on the strong orders received by Dow Industrials component Boeing. (.N: )

The home-builder sentiment slide revived concerns about the pace of economic growth that pressured markets last week after the Federal Reserve voiced caution in remarks released on Wednesday and Friday’s report that consumer sentiment slumped.

Traders said low trading volume contributed to the choppy price action. Crude oil trading volume was about 537,000 lots, 14.5 percent below the 30-day average.

Technical analysts keying off price charts eyed strong support for August U.S. crude futures from the 50-day moving average at $74.31 and solid overhead resistance at the 200-day moving average at $77.51 and the failure of prices to hold rallies above the 200-day moving average for four of the last five sessions.

Refined products and crude oil futures also received some support from news of a pipeline explosion and oil spill that shut China’s port at Dalian, forcing refinery cuts.

“The pipeline blast in China shutting the port and forcing refinery cuts is being seen as supportive, probably helping boost refined products futures,” said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.

PetroChina (0857.HK: ), which operates two refineries in Dalian, has started trimming refinery operations to cope with the port closure. As many as six Very Large Crude Carriers, or 12 million barrels of crude oil, are set to be diverted from the port.

In addition to the U.S. August crude contract’s expiration on Tuesday, traders will be eyeing data on June housing starts, expected to be down 2.2 percent, and weekly oil inventory reports starting with data from the American Petroleum Institute late on Tuesday.

A survey of analysts on Monday yielded a preliminary forecast for crude stocks to have fallen last week, with products stockpiles expected to be higher.

Stock Market Today

(Additional reporting by Gene Ramos in New York, Christopher Johnson in London and Fayen Wong in Perth)

Oil breaks 3-day skid as equities bounce