Forexpros – Crude oil futures extended sharp gains from the previous session on Monday, climbing to a four-week high as sentiment was boosted over a proposed plan to resolve the financial crisis in the single currency bloc following a weekend summit of Group of 20 financial leaders.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at USD87.99 a barrel during European morning trade, jumping 1.11%.
It earlier rose by as much as 1.5% to trade at USD88.40 a barrel, the highest price since September 16.
At the conclusion of the G-20 summit in Paris on Saturday, world financial leaders urged policy makers in the euro zone to deal “decisively” with the region’s ongoing debt crisis.
European leaders were expected to complete the rescue plan at a summit on October 23, in time to present to a meeting of G-20 leaders early next month.
The planned proposals include measures to restructure Greek debt, recapitalize European banks and increase the size of the region’s bailout fund, the European Financial Stability Facility.
The euro rose to a four-week high against the U.S. dollar, while the dollar index, which tracks the performance of the U.S. dollar against a basket of six other major currencies, edged down 0.15% to trade at 76.75, hovering close to a four-week low.
Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.
Crude prices found further support as concerns over the U.S. economy eased after official data on Friday showed that retail sales in the U.S. rose 1.1% in September, the biggest gain in seven months. Sales for August and July were revised higher as well.
Despite the recent jump in crude prices, Wall Street lender Morgan Stanley said in a report published over the weekend that it forecasts lower oil prices through the first half of 2012, citing “limited inventory draws” for crude and no immediate resolution to Europe’s debt crisis.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery rose 0.2% to trade at USD112.46 a barrel.
The spread between the Brent and the crude contracts narrowed to USD24.47 a barrel, after hitting a record high USD28.10 a barrel on Friday, when the November Brent contract expired.
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