Bloomberg News

Oil Advances to Near Three-Month High as Euro, Equities Advance

November 16, 2011

Nov. 16 (Bloomberg) -- Oil recouped losses to trade near its highest in three months as European stocks rose and the region’s single currency recovered, signaling diminished concern that the debt crisis will damage economic growth.

West Texas Intermediate futures gained as much as 0.4 percent after touching the highest intraday price since July 26 yesterday. The Stoxx Europe 600 Index advanced 0.6 percent as of 8:49 a.m. in London. The euro was 0.1 percent weaker against the dollar at $1.3529 after earlier falling as much 0.8 percent. The yield on 10-year Italian government debt fell 14 basis points to 6.93 percent.

“For quite a long time the oil price has correlated well with events in the sovereign debt crisis,” said Torbjoern Kjus, an Oslo-based senior market analyst at DnB NOR, who predicts the price of Brent crude will average $105 a barrel this quarter. “I would not be surprised to see prices falling back more. We are risking a banking crisis.”

Crude oil for December delivery advanced as much as 38 cents to $99.75 a barrel in electronic trading on the New York Mercantile Exchange and was at $99.58 at 10:13 a.m. London time. Earlier it lost 1 percent. Prices rose as high as $99.84 yesterday.

Brent oil for January settlement gained 15 cents to $112.33 a barrel on the ICE Futures Europe exchange in London. The European contract’s premium to West Texas crude narrowed to $12.74.

--Editors: John Buckley, Rob Verdonck

To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net


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