Oil ends higher as equities, products bounce

NEW YORK (BestGrowthStock) – Oil prices settled slightly higher on Thursday as equities rallied off early lows and stronger refined products helped pull crude futures off their early low.

U.S. June light crude oil futures edged up 2 cents, or 0.2 percent, to settle at $83.70 a barrel, recovering after falling almost $2 to a low of $81.73. Front-month crude hit an 18-month high above $87 on April 6.

Energy and equities markets were pressured early amid concerns about Greece’s ongoing fiscal problems, which also strengthened the dollar and pressured the euro.

Wall Street bounced on strong corporate earnings and a drop in new jobless claims. (.N: ) Also mentioned was relief in the market that President Barack Obama’s speech on financial reform carried no new barbs.

“The Dow is up nicely from early lows and crude futures are following that … the dollar is also off its early highs,” said Tom Knight, trader at Truman Arnold in Texarkana, Texas.

The euro fell (Read more about the trembling euro. ) to near one-year lows against the U.S. dollar after Moody’s cut Greece’s sovereign rating by a notch and placed the rating on review for a possible downgrade. [USD/]

U.S. oil prices were under pressure from the crude oil inventory rise of 1.8 million barrels to over 34 million barrels last week at Cushing, Oklahoma, the landlocked delivery point for U.S. crude futures.

The premium of July crude over front-month June crude hovered near $2 on Thursday. The recent strengthening contango, where the front-month is priced lower than the nearby month, has been the widest since December.

In London, ICE Brent crude ended slightly lower, down 3 cents at $85.67 a barrel, but still at a $1.97 premium to U.S. crude.

North Sea crude supplies will tighten over the next month due to offshore equipment maintenance and Brent is also responding to evidence of more Chinese demand, analysts say.

U.S. heating oil and gasoline futures also settled higher on Thursday. U.S. heating oil for May ended up 0.92 cent at $2.2150 a gallon. U.S. RBOB gasoline May futures settled 1.75 cents higher at $2.3002 a gallon.

The strength in heating oil and the heating oil crack spread, or profit margin, which has topped $10 a barrel, was attributed to buying fueled by a steep contango in order to put barrels into storage for sale at higher prices later, traders said.

News that U.S. Vice President Joseph Biden said he expected new U.N. sanctions on Iran by late April or early May also was supportive to oil, as was a pipeline blast in the northern Iraqi province of Nineveh, which was likely to affect oil exports via the Kirkuk-to-Ceyhan pipeline for as much as a week.

Rising U.S. crude oil inventories have helped hinder oil’s recent attempts to rally. The U.S. Energy Information Administration said Wednesday that stocks rose unexpectedly last week.

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(Additional reporting by Gene Ramos in New York, Christopher Johnson in London, Alejandro Barbajosa in Singapore; Editing by Walter Bagley)

Oil ends higher as equities, products bounce