Nov. 3 (Bloomberg) -- Crude oil rebounded from a two-week low as gold surged to a record in New York after India’s central bank purchased 200 metric tons of the metal from the International Monetary Fund.
Oil climbed 1.9 percent as the Indian gold purchase bolstered the appeal of commodities. Crude also got a technical bounce after touching $76.55 a barrel, the lowest intraday price since Oct. 15. When futures don’t drop further after reaching a new low, technical traders see it as a sign to purchase the contract.
“Oil is turning into a financial asset, the same type of thing as gold,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis.
Crude oil for December delivery climbed $1.47, or 1.9 percent, to settle at $79.60 a barrel at 3:03 p.m. on the New York Mercantile Exchange. Oil has risen 78 percent this year.
Prices were down from the settlement after the American Petroleum Institute reported at 4:30 p.m. that U.S. crude-oil stockpiles declined as supplies of distillate fuel, a category that includes heating oil and diesel, increased last week. December oil was up $1.27, or 1.6 percent, to $79.40 a barrel in electronic trading at 4:35 p.m.
Oil fell as much as 2 percent earlier today on the announcement that Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc received a second bailout from U.K. taxpayers, signaling that the global economy may take longer to recover from the worst recession since the 1930s.
Testing Support
“Oil tested support in the $76.50 area and failed to break through,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “From a technical standpoint, this was a sign that prices are moving higher.” more...
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