Bloomberg Crude Oil Rebounds From Five-Week Low as Stock Market Advances

April 21 (Bloomberg) -- Oil rebounded from a five-week low in New York as U.S. stocks gained after Treasury Secretary Timothy Geithner said the “vast majority” of the nation’s banks have more capital than needed.

Crude futures rose 1.4 percent as financial shares led U.S. equities higher. Energy prices also increased as the euro climbed against the dollar, bolstering the appeal of commodities as an alternative investment. The May contract, which expires today, is less expensive than the following months, allowing buyers to profit from storing oil.

“Both the May and June contracts were pretty oversold, so were ready to consolidate,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “The equity markets are higher and the dollar is giving back some of its recent gains. None of this is particularly germane to the oil business, but it’s giving the market a lift.”

Crude oil for May delivery rose 63 cents to settle at $46.51 a barrel at 2:52 p.m. on the New York Mercantile Exchange. Prices declined as much as $2.05, or 4.5 percent, to $43.83, the lowest since March 16. The more-active June futures contract increased 4 cents to $48.55.

Yesterday, crude futures fell $4.45, or 8.8 percent, to $45.88 a barrel, the biggest drop since March 2, as the stock market tumbled and the dollar surged against the euro.

“Crude oil is in a rather interesting area right now,” said Stephen Schork, president of Schork Group Inc. of Villanova, Pennsylvania. “A lot of the volatility we’re seeing is due to today’s expiration. For that reason I’ve been more focused on the June contract for the last week.” more...