Forexpros – Crude oil futures soared higher Tuesday, as the euro remained steady against the U.S. dollar, amid hopes that the European Central Bank will soon act to ease the debt crisis in the euro zone.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in September traded at USD93.41 a barrel during U.S. afternoon trade, rallying 1.31%.
Lifting the commodity complex, speculation that the ECB will soon take steps to help lower Spanish and Italian borrowing costs have been building since ECB head Mario Draghi indicated last week that the bank may restart its bond buying program.
Investors were waiting to see if Spain or Italy request assistance from the bloc’s bailout funds, after Spanish Prime Minister Mariano Rajoy indicated last week that Madrid may ask for European Financial Stability Facility aid.
A weaker dollar can lead to gains in oil, as it makes the commodity less expensive to traders paying with foreign currencies.
Oil prices remained supported by ongoing unrest in the Middle East, amid concerns over potential threats to oil supply from the region.
Syria’s prime minister fled the country on Monday as intense fighting continued, while a pipeline explosion halted Iraqi crude exports to Turkey.
Meanwhile, market participants were watching a developing storm in the Atlantic Ocean.
Tropical Storm Ernesto was forecast to move towards the southern part of the Gulf of Mexico by Thursday, but it was too early to know if it could disrupt oil and gas operations in the Gulf.
On the London based ICE Futures Exchange, Brent oil futures for September delivery were up 0.62% to trade at USD110.23 a barrel, with the spread between the Brent and crude contracts standing at USD18.02.
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