Nymex Crude Ends Near RecordGo CLL Go $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
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Nymex Crude Ends Near Record; by Matt Chambers, Dow Jones Newswires FWN Financial News Friday, July 27, 2007
NEW YORK Jul 27, 2007 (Dow Jones Commodities News via Comtex)
Crude oil futures jumped to a near-record close Friday, resuming a two-month surge as growth in the U.S. economy helped traders shrug off concerns about slowing demand after Thursday's equities slump.
U.S. second-quarter gross domestic product grew at its highest rate for more than a year, according to data released by the Commerce Department. The resurgence in U.S. growth reinforced confidence in oil demand after crude prices fell Thursday on concern a slide in equities could be a signal U.S. energy demand growth will slow.
"The crude market has returned to its run higher after the big sell-off in equities didn't continue," said Peter Donovan, a broker at Vantage Trading in New York. "Thursday's crude sell-off was a knee-jerk reaction to the stock market and while there were some losses (in equities), it wasn't anything like" the previous session, he said.
The front-month September light, sweet crude contract on the New York Mercantile Exchange ended up $2.05, or 2.7%, at $77.00 a barrel. Settlement at this level would be the highest for the front-month contract since July 14, 2006, and is just 3 cents a barrel below the all-time closing high of $77.03. Brent crude on the ICE futures exchange rose $1.04 to $76.22 a barrel. Final settlement prices weren't yet available.
Crude's gains came as the Dow Jones Industrial Average extended a slide of 2.3% logged Thursday. That move was triggered by worse-than-expected new home sales data and fears about credit markets seizing up. The DJIA was recently down 96.3 points, or 0.7%, at 13,377.
Crude prices began their run higher after the Commerce Department said U.S. GDP grew 3.4% in the second quarter, the most since the first quarter of 2006 and more than expectations of a 3.3% gain.
"Second-quarter GDP rebounding to its strongest pace since the beginning of last year should go a long way towards restoring confidence in the markets," said John Kilduff, vice president of risk management at brokerage MF Global in New York.
Nymex crude prices are up about 20% in the past two months, rising on forecasts of a coming supply crunch, concerns about Nigerian production and as a flood of speculative money has poured back in to the market.
Tensions between Iran and the U.S., and speculation any conflict between the two could impact oil supplies from the region, are also supporting prices.
Front-month August reformulated gasoline blendstock, or RBOB, rose 2.9 cents, or 1.4%, to $2.105 a gallon. August heating oil rose 3.89 cents, or 1.9%, to $2.0717 a gallon. Both contracts expire Friday.