Oil rose again today, heading for a third straight monthly gain as optimism about the global economy outweighed high inventories during a turbulent April marked by Greece's fiscal troubles, Iceland's volcanic eruption and a lawsuit against Goldman Sachs.
Global markets staged a relief rally yesterday as Greece moved to enact severe austerity measures to secure an aid package, easing fears that the debt crisis will spread across Europe. That boosted the euro and fuelled the biggest jump in equities since early March.
US crude for June delivery rose 41 cents to $85.58 a barrel, less than $2 from an 18-month high of $87.09 reached on April 6th. April is set to be the first month since September 2008 when the front-month contract traded continuously above $80 a barrel.
Euro zone sentiment jumped more than expected in April, data showed yesterday, pointing to a strengthening economy in the second quarter, while the number of US workers submitting new claims for unemployment benefits fell slightly last week.
ICE Brent crude for June gained 23 cents to $87.13 and was trading about $1.50 above US benchmark West Texas Intermediate crude. WTI had traded at discounts of more than $3 to Brent earlier this week under pressure from soaring inventories at the Cushing, Oklahoma delivery hub.
Crude stored at the Cushing pricing point rose by 1.2 million barrels to 36.8 million barrels in the week to April 27th, according to a report Thursday from energy industry data provider Genscape. That was the highest level since the company began to report them in May 2009.
Greece readied severe austerity measures yesterday to secure a multi-billion-euro aid package and avoid debt default. Earlier in the week, ratings agency Standard & Poor's slashed Greece's credit rating to junk status and also downgraded Portugal and Spain.
International Monetary Fund, European Union and European Central Bank officials are in Athens to negotiate the bailout and hope to wrap up a deal within days in an effort to prevent the debt crisis from sinking other fragile EU countries.
US federal prosecutors in New York have begun investigating Goldman Sachs Group Inc, raising the possibility of criminal charges against the company or its employees, a source familiar with the situation said yesterday.
Separately, a three-day US Senate standoff over efforts to overhaul financial regulation ended on Wednesday as Republicans dropped efforts to block a Democratic bill in exchange for a handful of concessions.
Reuters