Forexpros – Crude oil futures rallied to a 15-week high on Friday, as a broadly weaker U.S. dollar and signs of political progress in Italy and Greece boosted the appeal of riskier assets.
On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD99.17 a barrel by close of trade on Friday, surging 4.8% over the week, the sixth consecutive weekly gain and the longest streak of weekly advances since April 2009.
Crude prices rose to as high as USD99.37 a barrel on Friday, the highest price since July 27.
Italy’s Parliament on Friday approved an amendment to the country’s 2012 budget, paving the way for the resignation of Prime Minister Silvio Berlusconi on Saturday.
Concerns over Italy’s debt crisis intensified on Wednesday after the yield on Italian 10-year government bonds soared to a euro-lifetime high of 7.48%, above the 7% level which prompted Greece, Ireland, and Portugal to seek international bailouts.
Elsewhere, Greece’s caretaker Prime Minister Lucas Papademos and his cabinet were sworn in. Papademos will implement the country’s latest EUR130 billion bailout before leading the country to early elections.
The news prompted investors to move in to riskier assets, such as stocks and commodities, and shun traditional safe haven assets like the U.S. dollar.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.93% to settle at 77.10. Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.
Also Friday, preliminary data showing that U.S. consumer sentiment rose to its highest level in five months in November contributed to stronger risk appetite.
Crude prices rose sharply on Thursday as fears over Italy’s debt crisis eased and after data showed that U.S. jobless claims fell to the lowest level in seven months in the preceding week.
Meanwhile, signs of strong oil demand from the U.S. and China continued to underpin prices. Official data released Thursday showed that China imported 20.8 million tonnes of crude in October, equivalent to 4.92 million barrels a day. Oil imports were 26.9% higher than the 16.4 million tons of crude imported during the same month last year.
Weekly data from the U.S. Energy Information Administration released Wednesday showed that U.S. crude oil inventories fell by 1.4 million barrels in the preceding week to 338.1 million barrels.
The U.S. and China are the world’s two largest oil consuming nations.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery settled at USD112.88 a barrel by close of trade on Friday. The Brent contract edged 0.35% higher over the week, with the spread between the Brent and the crude contracts narrowing to USD13.71 a barrel, the lowest level since mid-June.
Brent prices were weighed after the International Energy Agency said Thursday that oil production in Libya was resuming faster than initially expected and was on track to hit 0.7 million barrels a day by the end of this year.
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