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Oil At Two-Month High As Equities Gain, Dollar Declines

By on August 7, 2012

Oil rose to the highest level in more than two months after better-than-estimated corporate earnings bolstered optimism that economic growth will accelerate.

Futures climbed as much as 2.4 percent as equities gained, led by commodity and industrial shares. The euro advanced against the dollar, boosting the appeal of commodities to investors. Tension increased in Syria after rebels said Prime Minister Riad Hijab defected in the highest-ranking departure since an uprising began last year.

“The oil market is getting strength from the financial side,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Equities are up and the dollar is down. We’re also getting support from increasing geopolitical risk in the Middle East.”

Crude oil for September delivery increased $1.75, or 2 percent, to $93.95 at 2:04 p.m. on theNew York Mercantile Exchange. The contract touched $94.42, the highest level since May 15. Prices are up 11 percent in the third quarter.

Brent oil for September settlement rose $2.42, or 2.2 percent, to $111.97 on the London-based ICE Futures Europe exchange. The contract reached $112.56, the highest level since May 15. The European benchmark’s premium to West Texas Intermediate, the grade traded in New York, increased to $18.02 from $17.35 yesterday.

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