BLBG: Oil Rises to Eight-Week High After U.S. Retail Sales Increase
By Mark Shenk
March 12 (Bloomberg) -- Crude oil futures rose to the highest level in more than eight weeks after U.S. retail sales unexpectedly climbed in February, signaling the economic recovery is accelerating.
Oil climbed as much as 1.3 percent after the Commerce Department reported that purchases gained 0.3 percent last month. A 0.2 percent decline was projected, according economists surveyed by Bloomberg News. Prices also gained as the dollar weakened against the euro and the International Energy Agency bolstered its outlook for global fuel demand this year.
“The retail sales number was better than expected, and anything that signals economic growth is bullish for oil,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “The IEA continues to increase their demand forecast, which is also bullish.”
Crude oil for April delivery rose 80 cents, or 1 percent, to $82.91 a barrel at 9:07 a.m. on the New York Mercantile Exchange. Prices touched $83.16, the highest since Jan. 11. Futures are up 1.7 percent this week and 77 percent higher than a year earlier.
The IEA increased its estimate for oil demand in 2010 by 70,000 barrels a day to 86.6 million barrels. That would mean a gain of 1.6 million barrels a day, or 1.8 percent, from 2009 levels, the Paris-based agency said.
Economies outside the Organization for Economic Cooperation and Development continue to lead the recovery, the group said.
“Almost all of the growth is occurring outside of the OECD,” O’Grady said. “If we get any growth in the OECD this year, you would see supplies tighten a lot.
The dollar weakened for a third day against the 16-nation euro, bolstering the appeal of commodities as an alternative investment. The U.S. currency traded at $1.3752 per euro, down 0.5 percent from $1.3681 yesterday.
Brent crude oil for April delivery rose 76 cents, or 1 percent, to $81.04 a barrel on the London-based ICE Futures Europe exchange.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
