Oil up to near $80 as traders eye rising equities
Oil prices crawled up to near $80 a barrel Thursday as rising stock markets cheered crude investors ahead of fourth quarter corporate earnings reports.
By early afternoon in Europe, benchmark crude for February delivery was up 17 cents to $79.82 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, the contract reached $80.36 before retreating.
On Wednesday, the contract gave up $1.14 to settle at $79.65.
Most major Asian and European stock indexes gained Thursday after the Dow Jones industrial average rose 0.5 percent Wednesday. Companies began reporting fourth quarter earnings this week with chipmaker Intel Corp. is expected to post results Thursday and banking giant JPMorgan Chase & Co. on Friday.
Oil investors often look to stock markets as a measure of overall investor sentiment about the economy.
"The stock market is maintaining its gains of 2009 but the volume traded on the NYSE remains very low and the U.S. oil demand numbers still do not show any confirmation of a demand recovery," said Olivier Jakob of Petromatrix in Switzerland.
Oil has fallen from near $84 a barrel earlier this week on signs of weak U.S. crude demand. The Energy Information Administration said Wednesday that U.S. oil inventories grew more than expected last week, despite a cold weather spell that analysts expected to boost demand for oil products such as heating oil.
"From virtually any perspective, the weekly EIA stats looked bearish," Galena, Illinois-based Ritterbusch and Associates said in a report. "Further price slippage toward the $75 area would appear likely."
In other Nymex trading in February contracts, heating oil rose 0.21 cent to $2.0967 a gallon and gasoline gained 0.72 cent to $2.0674 a gallon. Natural gas futures rose 0.3 cent to $5.736 per 1,000 cubic feet.
"Temperatures in the U.S. are expected to normalize this week, limiting the chance of higher heating fuel demand," said JBC Energy in Vienna.
In London, Brent crude for February delivery rose 4 cents to $78.35 a barrel on the ICE Futures exchange.