BS: Oil in Longest Rising Streak Since October on Economic Recovery
By Yee Kai Pin
Dec. 28 (Bloomberg) -- Crude oil rose for a fourth day, its longest winning streak since October, on signs of an economic recovery in the U.S., the world’s largest energy consumer.
Oil climbed above $78 a barrel to a three-week high after initial U.S. jobless claims dropped more than expected, prompting traders to close bets on falling prices. A strengthening labor market may boost consumer spending, the biggest part of the U.S. economy.
“There’s short-covering before the end of the year,” said Ken Hasegawa, a commodity derivatives sales manager at Newedge in Tokyo. “We have to watch carefully the economic data -- some may be bad. We still need confidence to understand this market will stay strong.”
Crude oil for February delivery rose as much as 63 cents, or 0.8 percent, to $78.68 a barrel in electronic trading on the New York Mercantile Exchange. That’s the highest intraday price since Dec. 1. The contract was at $78.51 a barrel at 12:08 p.m. Singapore time. Futures, which lost 54 percent in 2008, have gained 76 percent this year, set for the biggest annual gain in a decade.
The number of Americans filing claims for unemployment benefits last week declined to the lowest level since September 2008, the Labor Department said Dec. 24. Initial jobless claims fell by 28,000, more than forecast, to 452,000 in the week ended Dec. 19.
The decline in U.S. home prices probably eased while consumer confidence increased in December, economists said before separate reports tomorrow from S&P/Case-Shiller and the New York-based Conference Board.
Demand Bets
Oil has more than doubled since slumping to $32.70 a barrel on Jan. 20, as traders bet demand for fuels will rebound when economies emerge from the global recession. Prices reached $82 a barrel on Oct. 21. Last year, futures traded between $32.40 and $147.27 a barrel, an all-time high.
“I don’t think oil is going to go much further this year,” said Peter McGuire, managing director at CWA Global Markets Pty in Sydney. “It depends on the U.S. dollar. If it continues to strengthen, commodities will come off, but if it weakens you could see a nice rally.”
Brent crude oil for February settlement rose as much as 72 cents, or 0.9 percent, to $77.03 a barrel on the London-based ICE Futures Europe exchange. It was at $76.84 a barrel at 12:04 p.m. Singapore time. On Dec. 24, the contract gained 1.1 percent to $76.31 a barrel, the highest settlement since Dec. 7.
--With assistance from James Paton in Sydney. Editors: Ryan Woo, Jane Lee.
To contact the reporter on this story: Yee Kai Pin in Singapore at +65-6311-2472 or kyee13@bloomberg.net
