BLBG: Oil Rises to Six-Week High After U.S. Consumer Spending Climbs
By Mark Shenk
March 1 (Bloomberg) -- Crude oil rose to a six-week high after U.S. consumers increased spending for a fourth consecutive month in January, signaling that fuel demand may climb.
Oil climbed as much as 1.2 percent after the Commerce Department reported a 0.5 percent increase in purchases. Prices advanced on Feb. 26 following a report by the department that U.S. gross domestic product increased by the most in six years, renewing optimism about the strength of the economic recovery.
“If consumer spending is up, we can expect to see higher demand going forward,” said Phil Flynn, vice president of research at PFGBest in Chicago.
Crude oil for April delivery rose 46 cents, or 0.6 percent, to $80.12 a barrel at 9:48 a.m. on the New York Mercantile Exchange. Futures touched $80.62, the highest level since Jan. 13. Oil is up 79 percent from a year earlier.
The Standard & Poor’s 500 Index gained 6.95, or 0.6 percent, to 1,111.44. The Dow Jones Industrial Average rose 52.76, or 0.5 percent, to 10,378.02.
“The consumer spending numbers were positive,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York. “We finished last week strongly and the momentum is still on the bullish side.”
European manufacturing accelerated at the fastest pace in more than two years in February as reviving global demand boosted export orders. A manufacturing index for the 16-member euro region increased to 54.2 from 52.4 in January, London-based Markit Economics said today. That’s above an initial estimate of 54.1 published on Feb. 19 and the highest since August 2007.
“Since late last week we’ve been seeing some economic optimism creep back into the oil market,” Flynn said.
Brent crude for April settlement rose 47 cents, or 0.6 percent, to $78.06 a barrel on the London-based ICE Futures Europe exchange.
To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net
