Crude-oil futures added as much as $2 a barrel Monday, gaining support from rallying U.S. stocks as well as declines in the U.S. dollar, which fell about 1% since Friday against a basket of six currencies. Crude (NYSE:USO) for September delivery is up 2.59% to $87.59 a barrel on the New York Mercantile Exchange as investor sentiment continues to recover after taking a beating last week.
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However, according to Tim Evans, an analyst with Citigroup’s (NYSE:C) Citi Futures Perspective, “the larger picture remains gloomy, with rising interest rates tending to cool growth in emerging markets, while fiscal austerity remains the order of the day.”
Commerzbank analysts say, “the market has calmed somewhat now and appears to have quickly adjusted to the new reality, namely weak economic growth,” allowing oil prices to rise slightly. However, the firm adds in a note to clients, “Even if the short-term trough appears to be reached, weak physical demand should keep oil prices in check”
Heating oil and gasoline (NYSE:UGA) futures also climbed Monday, but natural gas declined on weak demand. September heating oil rose 1.24% to $2.94 a gallon while September gasoline rose 1.56% to $2.87 a gallon. Natural gas for September delivery fell 0.64% to $4.04 per million British thermal units.