Futures retraced some of last week’s 4 percent slump after Ireland yesterday applied for a bailout from the European Union and the International Monetary Fund to save its banks. The decision pushed the euro to a one-week high versus the dollar, boosting the appeal of commodities to investors.
“The euro debt concerns are easing as Ireland has decided to accept the bailout and that will lead to a weaker dollar,” said Serene Lim, a commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “It’s more of the dollar weakening that’s helping to drive oil higher.”
Crude for January delivery gained as much as 77 cents, or 0.9 percent, to $82.75 a barrel in electronic trading on the New York Mercantile Exchange. It was at $82.62 at 2:29 p.m. Singapore time. On Nov. 19, the contract slipped 44 cents, or 0.5 percent, to $81.98. Futures are up 4.1 percent this year.
Prices fell at the end of last week after China ordered banks to raise reserves in a move that may slow growth and crimp fuel demand in the world’s largest energy-consuming country.
The Dollar Index, used by IntercontinentalExchange Inc. to track the greenback against six major global currencies, fell 0.4 percent to 78.167. It’s down for a fourth day.
“The Irish debt situation has been contained for the moment,” said David Taylor, a market analyst at CMC Markets Ltd. in Sydney.
Diesel Demand
U.S. diesel consumption increased in October from a year earlier, a signal that the U.S. economy is rebounding, according to the American Petroleum Institute.
Demand for ultra-low sulfur diesel, the type used on highways, rose 8.4 percent to average 3.19 million barrels a day last month, the industry-funded group said Nov. 19. Consumption during the first 10 months of this year climbed 2.9 percent to 2.97 million barrels a day.
Hedge funds cut bullish bets on oil by the most in almost three months. Large speculators reduced so-called long positions, or wagers on rising prices, by 15 percent in the seven days ended Nov. 16, according to the U.S. Commodity Futures Trading Commission’s weekly report Nov. 19. It was the first drop in four weeks and the largest decline since the seven days to Aug. 24.
Brent crude for January settlement advanced as much as 84 cents, or 1 percent, to $85.18 a barrel on the London-based ICE Futures Europe exchange. On Nov. 19, the contract dropped 71 cents, or 0.8 percent, to $84.34.
