BLBG: Crude Rises as Euro Gains Against Dollar, Europe Acts on Greece
By Robert Tuttle
Feb. 16 (Bloomberg) -- Crude oil advanced as the euro strengthened against the dollar and rising stocks led to increased confidence that a global economic recovery will lead to higher fuel demand.
The euro rebounded against the dollar after weakening to its lowest level in nine months yesterday. European stocks rose for the sixth time in seven days. Europe’s finance ministers said they’re prepared to impose deeper deficit cuts on Greece before spelling out further help for the country.
“I suspect the euro basically is behind this” rise in oil, Neil Atkinson, director of energy research at Datamonitor in London, said by telephone. “The Europeans have started to get their act together” regarding Greece’s debt problems.
Crude oil for March delivery rose as much as $1.33, or 1.8 percent, to $75.46 a barrel in electronic trading on the New York Mercantile Exchange today. It traded at $75.34 a barrel at 11:51 a.m. London time.
The dollar traded at $1.3647 per euro at 11:50 a.m. London time, compared with $1.3598 per euro yesterday. The euro has weakened 4.7 percent against the dollar since the start of the year, partly because of concerns over the euro zone’s stability in the face of large debts among member nations.
Europe’s Dow Jones Stoxx 600 Index rose 0.6 percent to 243.25 at 11:09 a.m. in London as earnings from Barclays Plc topped estimates and mining companies rallied. The MSCI Asia Pacific Index climbed 0.5 percent and futures on the Standard & Poor’s 500 Index rose 0.4 percent.
Greece Deficit Measures
The ministers from the 16 nations that use the euro told Greek authorities to prepare more deficit measures by March 16, in case the government fails to show sufficient progress on its budget goals. Greece has pledged to reduce the European Union’s biggest budget gap from 12.7 percent of gross domestic product in 2009 to 8.7 percent by year end.
Brent crude for April delivery rose as much as $1.59, or 2.2 percent, to $74.10 a barrel on the ICE Futures Europe exchange in London. It traded at $73.99 a barrel at 11:49 a.m.
The U.S. was shut yesterday for Presidents’ Day. Yesterday’s electronic trades and today’s session will count toward the settlement. Markets in China, Hong Kong, Singapore and Malaysia are closed for the Lunar New Year holiday.
To contact the reporter on this story: Robert Tuttle in Doha at rtuttle@bloomberg.net
