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Oil hits three-week high as Wall Street rallies
July 23, 2009 / 4:20 AM / 8 years ago

Oil hits three-week high as Wall Street rallies

NEW YORK (Reuters) - Oil prices rose to a three-week high above $67 a barrel on Thursday, propelled by a rally on Wall Street driven by strong corporate earnings and positive U.S. housing data.

<p>A meter measuring barrels of oil sold is seen aboard Chevron's Petronius oil platform, located 100 miles (161km) off the coast of New Orleans, in the Gulf of Mexico on June 3, 2008. REUTERS/Jessica Rinaldi</p>

U.S. crude oil surged $1.76 to settle at $67.16 a barrel, the highest since July 1, while London Brent rose $2.04 to $69.25.

“The financial markets are back in play as primary driver of oil prices as today’s triple digit run-up in the Dow Jones Industrial Index to highest levels of this year ignited a fresh influx of passive investment capital into the energy space,” said Jim Ritterbusch, president of oil consultancy Ritterbusch & Associates.

Wall Street rallied on the back of strong corporate earnings this week from companies such as 3M & Co (MMM.N), AT&T Inc (T.N), and eBay Inc (EBAY.O) that analysts said could portend an economic recovery. .N

Oil and other commodities have tracked equities markets in recent months as analysts seek signs of the economic outlook after the downturn cut world energy demand for the first time in a quarter century.

U.S. housing data added another glimmer of hope for an economic turnaround, with sales of existing homes rising in June -- the first time since 2004 that the measure rose three months in a row.

Gains in the energy markets were led by U.S. gasoline futures, which climbed 7.49 cents to $1.9132 a gallon amid slowing domestic refinery activity.

The U.S. refining sector has been hit by a slew of unplanned outages, adding to deep run cuts enacted in reaction to weak profit margins and slumping U.S. demand for fuel under the weight of the recession. <REF/OUT>

U.S. oil inventory data released Wednesday showed U.S. gasoline stockpiles up 800,000 barrels last week to 215.4 million, bringing them about 3 percent above a year ago.<EIA/S>

Limiting oil’s gains Thursday, the U.S. Labor Department released data showing first-time jobless benefit claims rose by around 30,000 to 554,000 for the week ended July 18.

Economists in a Reuters survey had forecast a total of 550,000 new filings, compared with 522,000 in the prior week.

Analysts at Barclays Capital wrote in a commodities research note that oil between $65 to $75 a barrel “would be the most comfortable range for prices within this quarter.” (Additional reporting by Chris Baldwin in London; Editing by Lisa Shumaker)

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