Forexpros –
Forexpros – Crude oil futures surged higher Tuesday, hitting a new 3 month high, as increased euro zone central bank intervention speculation boosted demand for the commodity complex.
On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD97.11 a barrel during U.S. afternoon trade, rallying 0.88%.
Earlier in the day, prices rose by as much as 1.65% to trade at USD97.83 a barrel, the highest level since May 8.
Crude oil sentiment strengthened after the U.K.’s Telegraph newspaper said earlier that it could confirm weekend reports that the ECB may set a cap on peripheral euro zone bond yields at its next policy meeting in September.
On Monday, the central bank dismissed the reports, saying it was “misleading” to report on decisions which have not yet been taken.
Speculation over the possibility of ECB intervention saw Spanish borrowing costs fall at an auction of short-term government debt, with Madrid successfully auctioning EUR4.5 billion of bills, the top end of the target range.
Meanwhile, investors were eyeing a series of upcoming euro zone meetings, amid hopes that leaders would make some progress on steps to the stem the crisis in the region.
Luxemburg’s Prime Minister Jean-Claude Juncker, who also heads the group of euro zone finance ministers, was to hold talks with Greek Prime Minister Antonis Samaras on Wednesday, to discuss a two-year extension of the country’s economic reform program.
German Chancellor Angela Merkel is to meet with French President Francois Hollande on Thursday, while Antonis Samaras is to meet with the French and German leaders later in the week.
Market participants were also anticipating the minutes of the Fed’s August policy meeting later in the week.
Upbeat U.S. economic data released last week indicated that the economy may be stabilizing and tempered expectations for another round of quantitative easing by the Fed.
Oil traders were also looking ahead to fresh weekly information on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by a modest 0.1 million barrels.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Oil markets have been bullish lately, with New York-traded crude prices up nearly 20% since touching a low of USD77.27 a barrel on June 28.
Prices have been well-supported amid growing expectations that central banks around the world will soon announce fresh stimulus measures to help spur weak global growth.
Renewed fears over escalating violence in Syria and lingering tensions between Iran and the West have also been supporting prices in recent weeks.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery added 1.4% to trade at USD115.33 a barrel, with the spread between the Brent and crude contracts standing at USD17.57 a barrel.
Earlier in the day, London-traded Brent prices touched USD115.44 a barrel, the highest since May 4.
Brent prices have been well-supported in recent weeks, rallying nearly 22% from the lows touched in June, amid growing concerns over tightening supplies from the North Sea region and following the launch of Western-led sanctions targeting Iranian oil exports on July 1.
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