Crude Rebounds as EU Debt Fears Wane
Source: Dow Jones Newswires, Jerry DiColo (11/18/10)
"European debt concerns battered the euro, pushed down commodities."
"There is nothing more bearish for oil than a debt crisis and nothing more bullish than a bailout," said Phil Flynn, oil analyst with PFG Best, in a client note.
The euro turned higher Thursday, recently trading up 0.7% to $1.36. Worries that Ireland's debt woes could spread to other European countries had battered the euro and pushed down energy and commodity prices.
Broader markets aimed higher early Thursday, taking their cues from rising European stock markets. Futures on the Dow Jones Industrial Average were recently up 95 points to 11090.
Gold futures were recently up 1.2% to $1,353.10 a troy ounce, while sugar and cotton traded higher as well.
Oil prices have fallen sharply over the past week, dropping from two-year highs above $88 a barrel last Thursday. Fears about the euro zone combined with expectations that China will raise interest rates to cool its growing economy, raising doubts about future crude demand.
But analysts said the market has mostly accounted for any changes to China's monetary policy.
"Everyone got all upset about the rate hike there, but that is not a really bad thing because it's healthy for the economy in the longer term," said Matt Zeman, chief market strategist at LaSalle Futures. "As more positive data comes out of China, that is going to give markets a boost also."