BLBG: Crude Oil Rises Near Two-Year High as Dollar Falls on U.S. Home Prices
Oil traded near a two-year high as the dollar dropped against the euro on a report that U.S. home prices fell more than forecast in October, bolstering the case for the Federal Reserve to continue its debt-purchases program.
Oil increased as the dollar fell for a fourth consecutive day, boosting the appeal of commodities as an alternative investment. The S&P Case-Schiller index of property values fell 0.8 percent from October 2009, the biggest year-over-year decline since December 2009, the group said today in New York.
“The dollar’s under a lot of pressure today, and that seems to be the major factor,” said Phil Flynn, a Chicago-based analyst and trader with investment adviser PFGBest.
Crude for February delivery gained 46 cents, or 0.5 percent, to $91.46 a barrel at 9:23 a.m. on the New York Mercantile Exchange. It touched $91.67, 21 cents below the two- year intraday high of $91.88 reached yesterday. Futures have advanced 15 percent this year.
Brent crude for February settlement increased 30 cents to $94.15 a barrel on the London-based ICE Futures Europe exchange.
The dollar fell 0.4 percent to $1.3213 per euro from $1.3165 yesterday in New York. The currency has retreated 0.9 percent in the past four trading days.
“We’re staying in the $90 area, with an eye on hitting $100 in the new year,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “There’s been increasing evidence of global growth, not just in China. Demand is picking up and should rise further in coming months.”
Oil, which rallied 78 percent in 2009, has risen this year as signs of a global economic recovery bolstered optimism fuel demand will grow.
U.S. retailers’ 2010 holiday sales jumped 5.5 percent for the best performance in five years. Retail sales, excluding autos, rose to $584 billion from Nov. 5 through Dec. 24, according to MasterCard Advisors’ SpendingPulse, which measures retail sales by all payment forms. That compares with a 4.1 percent gain a year earlier.
To contact the reporters on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net; or Mark Shenk in New York at mshenk1@bloomberg.net.
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.
