Forex Pros — Last week saw crude oil prices post their biggest weekly gain in almost three months, as easing concerns over Greece’s sovereign debt crisis saw the U.S. dollar weaken, boosting the appeal of commodities.
On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded at USD94.77 a barrel by close of trade on Friday, jumping 4% over the week, the largest weekly rise since the week ended April 8.
The August contract rose to USD95.82 on Wednesday, the highest price since June 16.
Greece’s parliament passed the first of two critical austerity bills on Wednesday, paving the way for the release a EUR12 billion tranche of bailout funds from the European Union and International Monetary Fund needed to avert a sovereign debt default.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dropped 2.05% on the week to settle at 74.59, after earlier falling to 74.51, the lowest level since June 10.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
On Friday, markets digested a slew of manufacturing data to help gauge the strength of future expectations for global oil demand.
The U.S. Institute for Supply Management said that its June manufacturing index came in at 55.3, above expectations for 51.5, marking the 23rd consecutive month of growth.
Meanwhile, China’s Federation of Logistics and Purchasing reported that its monthly purchasing managers index fell to 50.9 in June, the slowest pace in 28 months.
Separately, British manufacturing activity in June grew at its slowest pace in 21 months, while a similar index for the euro zone fell to an 18-month low in June.
The U.S. and China are the world’s two largest oil consuming nations and manufacturing numbers are used as indicators for fuel demand growth.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery traded at USD111.56 a barrel by close of trade on Friday. The Brent contract rallied 5.4% on the week and was up USD16.79 on its U.S. counterpart.
Nymex floor trading is closed Monday for the U.S. Independence Day holiday.