Oil ends higher on economic data, spill

By Robert Gibbons

NEW YORK (BestGrowthStock) – Oil prices ended higher on Monday after reaching a 19-month peak as economic optimism lifted Wall Street and on concerns that an oil spill off the U.S. Gulf Coast could disrupt short-term supply.

“Nearby crude and gasoline futures advanced … today mainly on the coattails of an upsurge in the stock market. The Gulf coast oil spill likely added to today’s gains,” Jim Ritterbusch, president at Ritterbusch & Associates in Galena, Illinois, said in a note.

U.S. crude futures prices pushed above $87 a barrel after Wall Street was boosted by a government report that showed U.S. consumer spending increased as expected in March.

Separately, the Institute for Supply Management said that the U.S. manufacturing sector grew in April at the fastest pace in almost six years.

The reports came after details of the 110 billion-euro ($145 billion) rescue package for Greece helped European shares turn positive.

U.S. crude rose 4 cents, or 0.05 percent, to settle at $86.19 a barrel.

Monday’s high trade of $87.15 eclipsed the previous 2010 peak of $87.09 struck on April 6 and was the highest front-month crude price since $89.82 traded on October 9, 2008.

Brent crude rose $1.50 to settle at $88.94 a barrel and traded as high as $89.58, also the highest since October 2008.

Brent’s unusual premium to U.S. crude partly reflects high inventories at the Cushing, Oklahoma, hub that is the delivery point for the U.S. crude oil benchmark, analysts said. Brent has traded above U.S. crude only about 10 percent of the time in the last 20 years.

Stronger demand in India, China and other Asian economies also was cited as a factor lifting Brent above U.S. crude.

Traders will be anticipating weekly reports on U.S. oil inventory levels from industry on Tuesday and the government on Wednesday. A Reuters survey of analysts on Monday yielded a forecast for higher crude oil stockpiles. (EIA/S: )

On Saturday, the U.S. government said two offshore natural gas production platforms in the Gulf of Mexico were shut as a safety precaution, the first sign that the oil slick was affecting the region’s energy production.

But shipping operations at the Louisiana Offshore Oil Port were normal despite the offshore oil spill, a spokeswoman for the port said on Monday.

BP Plc (BP.L: ), its reputation battered by the oil spill threatening the U.S. Gulf Coast, said on Monday it was working to stop the leak and promised to pay cleanup and compensation claims.

Crude futures posted gains on Monday despite the dollar’s strength. The dollar rose against the euro and a basket of currencies (.DXY: ) on the strong U.S. manufacturing data and lingering concerns about Greece. (USD/: )

One factor that analysts said might limit demand growth in oil and other economically sensitive commodities was China’s move on Sunday to raise the proportion of deposits that lenders must keep in reserve at the central bank, another step in a campaign to curb inflation.

Investing

(1 euro=$1.32)

(Additional reporting by Gene Ramos in New York, Alex Lawler in London and Fayen Wong in Perth; Editing by Lisa Shumaker)

Oil ends higher on economic data, spill