Europe Hopes and Strong US Sales Data Push Oil Prices Up 3 Percent

October 15 00:00 2011

New York, October 15 (RainbowNewsLine.com) – Optimism about the prospect that the euro zone debt crisis would be addressed by a deal between European leaders and a stronger-than-expected US retail sales, oil prices rose 3 percent on Friday, posting a second straight weekly gain. The premium to US crude strengthened and intraday reached a record $28.10 a barrel as the front-month November contract of Brent oil is expiring on Friday.

Richard Ilczyszyn, a senior market strategist at MF Global in Chicago, said “Equities were up on the retail numbers and good Google (NASDAQ: GOOG) results and oil is very responsive to those numbers and we’re seeing a reallocation of funds, with some shorts possibly moving back into long positions.”

Despite September retail sales growing at their fastest pace in seven months, consumer sentiment slipped in early October more than expected, sending the gauge to the lowest level in more than 30 years.

US November crude was up $2.57 to settle at $86.80 a barrel, the highest settlement since September 20. The 4.6 percent weekly gain was the biggest since the week to October 7. Brent’s 8.3 percent weekly gain was the largest since the week to February 25. Brent December crude rose $3.03 to settle at $112.23, after reaching $112.65 intraday peak. US heating oil futures also posted near 3 percent gains as the heating season in the northern hemisphere is fast approaching.

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