Bloomberg News

Crude Oil Climbs Ahead of German Vote on European Bailout Fund

September 29, 2011

Sept. 29 (Bloomberg) -- Oil climbed in New York, paring its biggest quarterly drop since 2008, as investors speculated that German lawmakers will approve a measure to expand a euro-area bailout fund, supporting economic growth and fuel demand.

West Texas Intermediate advanced as much as 0.7 percent after dropping 1.9 percent earlier. German Chancellor Angela Merkel is seeking support among her coalition lawmakers for the vote today to expand the European Financial Stability Facility. Oil in New York pared its earlier decline after falling to technical support levels.

“We’re trading from headline to headline and that’s all markets, not just the oil market,” Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney, said by telephone today.

Crude for November delivery gained as much as 54 cents to $81.75 a barrel in electronic trading on the New York Mercantile Exchange and was at $81.63 at 5:10 p.m. Sydney time. The contract yesterday slid 3.8 percent to $81.21. Futures are down 8 percent this month and 11 percent this year. Prices have dropped 14 percent since the end of June, the biggest quarterly loss since the last three months of 2008.

Brent oil for November settlement was at $104.33 a barrel, up 52 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $22.70 to New York crude, compared with a record of $26.87 on Sept. 6.

Oil rebounded in New York after falling as low as $79.64. Futures have technical support along the lower Bollinger Band at about $79.21 a barrel today, according to data compiled by Bloomberg. Buy orders tend to be clustered near chart-support levels. Five-day stochastic oscillators have fallen below 30, signaling prices have dropped too quickly.

--Editors: Paul Gordon, Ryan Woo

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net


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