Oil rose in New York as the euro’s rebound fueled optimism that European leaders may be able to come to an agreement on how best to combat the debt crisis that threatens the region’s economy.
Futures rose as much as 0.8 percent after dropping 3.7 percent yesterday. The euro strengthened 0.6 percent against the dollar while Italian and Spanish lending costs declined following reports the European Central Bank bought the nations’ securities. New York crude is up 0.7 percent this week.
“The Italian bond spreads are narrowing,” said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. “That gives some confidence to the market and pushes up the prices of oil.”
Crude for December delivery on the New York Mercantile Exchange rose as much as 82 cents to $99.64 a barrel and was at $99.63 at 9:32 a.m. London time. The contract, which yesterday dropped $3.77 to $98.82, expires today. The more-active January contract gained 81 cents to $99.63.
Brent oil for January settlement gained $1.14 to $109.36 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to U.S. futures widened to $9.76 a barrel from $9.29 at yesterday’s settlement.
New York crude may fall next week on heightened concern that Europe’s debt crisis is spreading and will hurt demand, according to a Bloomberg News survey. Eighteen of 36 analysts, or 50 percent, forecast oil will fall through Nov. 25. Eleven predicted a gain, and seven said there will be little change. Last week, 58 percent of those surveyed projected a drop.
Crude supplies at Cushing, Oklahoma, the delivery point for U.S. futures, were at 32 million barrels last week, compared with this year’s high of 41.9 million in the week ended April 8, according to data compiled by Bloomberg.
Applications for jobless benefits decreased 5,000 in the week ended Nov. 12 to 388,000, the Labor Department said yesterday. Housing starts decreased 0.3 percent to a 628,000 annual rate in October, according to the Commerce Department. The median estimate of economists surveyed by Bloomberg News called for a drop to 610,000. Building permits, a proxy for future construction, jumped 10.9 percent.
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