Gasoline rose from a two-week low after European Central Bank President Mario Draghi said policy makers will do whatever is needed to preserve the euro, reducing fears about the region’s debt crisis and its impact on the global economy and fuel demand.
Futures gained for the first time in four days as Draghi said the ECB “is ready to do whatever it takes” to preserve the euro. Gasoline extended gains after better-than-expected U.S. reports on jobless claims and durable-goods orders.
“The market is taking Draghi’s remarks as meaning that the ECB is getting ready to print more euros and that would be a major change for the ECB and Draghi,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “That’s good for the oil market. The dollar has been the safe haven play because the euro was going to fall apart.”
Gasoline for August delivery rose 4.91 cents, or 1.8 percent, to $2.842 a gallon at 9:46 a.m. on the New York Mercantile Exchange. The more actively traded September contract gained 4.38 cents to $2.76.
Draghi’s remarks came in a speech he made at the Global Investment Conference in London today. ECB Governing Council member Ewald Nowotny yesterday buoyed the euro and stock markets after saying in an interview that there are arguments in favor of giving Europe’s permanent bailout fund a banking license.
In the U.S., applications for jobless benefits decreased by 35,000 in the week ended July 21 to 353,000, Labor Department figures showed today. Orders for goods meant to last at least three years rose 1.6 percent for a second month, a Commerce Department report showed today.
“Draghi’s comments seemed to turn the market and now we have good economic data with the jobless claims and durable goods orders,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “With good news and the dollar down sharply, the optimism is taking over.”
The dollar fell 1.1 percent against the European currency at 9:48 a.m. in New York. A weaker dollar increases the investment appeal of commodities.
Heating oil for August delivery rose 3.94 cents, or 1.4 percent, to $2.8834 a gallon on the Nymex. The September contract advanced 3.71 cents to $2.8838.
Regular gasoline at the pump, averaged nationwide, increased 0.5 cent to $3.49 a gallon, according to AAA. Prices, which are the highest since June 18, are down 11 percent from a year-to-date high of $3.936 on April 4.
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