Friday July 24, 12:34 PM
Oil nears $70 on hopes for global recovery
LONDON (AFP) - Oil prices rose towards 70 dollars on Friday, aided by rebounding stock markets, a weaker dollar and hopes of a global economic recovery that could kick-start energy demand.
Brent North Sea crude for September delivery gained 38 cents to 69.63 dollars per barrel.
New York's main futures contract, light sweet crude for September, was up 26 cents to 67.42.
Global equity markets advanced again Friday, extending a blistering rally which has taken them back up to their January levels as recovery hopes were sparked by upbeat US data and corporate results.
"Oil is on the up again and Brent tried to hit the 70-dollar mark but has just pulled back," said Capital Spreads analyst Simon Denham.
"With equity prices on the up, this is serving to boost oil prices too -- as the two asset classes seem to be so intrinsically linked at the moment."
In the foreign exchange market, the European single currency advanced Friday against the dollar after news of strengthening business confidence in Germany, Europe's biggest economy.
A weaker dollar boosts prices because dollar-priced crude becomes cheaper for buyers using stronger currencies and so stimulates demand.
Prices rose on Thursday as sharp gains on Wall Street upbeat earnings and rising US home sales fuelled optimism that the world's biggest energy consuming nation may be pulling out of a deep recession.
"Corporate earnings and US house sales provided the drive," said PVM oil analyst David Hufton.
"AT&T (NYSE: T - news) and 3M among others posted better quarterly results than expected although Microsoft (NASDAQ: MSFT - news) and Amazon were less impressive.
"It's the good news that is being heard and, even though profits are well below last year?s levels, expectations have been set so low that pleasant surprises are becoming the norm."
In addition, a stronger-than expected report on US home sales helped provide a catalyst for the market, spurring hopes of an economic rebound.
A revived housing market is considered key to the US economy's recovery from a steep downturn.
The blue-chip Dow Jones Industrial Average rose more than two percent to finish above the 9,000-point level for the first time since January.
US existing home sales rose for the third consecutive month in June.
"If it was the collapse of the US housing market that burst the bubble, then any sign of a revival is of major significance," Hufton said.
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