Oil rise for first time in six days

Jamaicans queue for gasoline to prepare for the arrival of Tropical Storm Sandy, predicted to be a hurricane before it reaches the island on Wednesday. (REUTERS/Gilbert Bellamy)

Oil climbed for the first time in six days in New York, ending the longest losing streak since May as Nikkei reported the Bank of Japan will add to its stimulus policies and reports signaled U.S. economic growth.

Futures gained as much as 1.2 percent after the newspaper said Japan’s central bank will consider increasing its asset-purchase program by 10 trillion yen ($125 billion) to 90 trillion yen at an Oct. 30 meeting.

Fewer Americans filed first-time applications for jobless benefits last week and durable goods orders rose in August, government reports showed.

“The rally began with the Nikkei report that the Bank of Japan may be boosting stimulus,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “The market definitely looked over-extended to the downside after falling for five days.”

Crude oil for December delivery rose 60 cents, or 0.7 percent, to $86.33 a barrel at 9:18 a.m. on the New York Mercantile Exchange. The contract settled at $85.73 Wednesday, the lowest since July 10. Prices are down 13 percent this year.

Brent oil for December settlement increased $1.10, or 1 percent, to $108.95 a barrel on the London-based ICE Futures Europe exchange. The contract declined for a seventh day Wednesday, the longest losing streak since July 2010. The European benchmark crude was at a premium of $22.62 to West Texas Intermediate oil traded in New York, up from $22.12 a day earlier.

Japan’s Economy Minister Seiji Maehara, who has been calling for more action from the central bank, said earlier this week that he may attend the meeting. He was present at the central bank’s previous gathering, the first minister to do so for more than nine years.

The U.S. Federal Reserve Wednesday said it would maintain stimulus after last month committing to a third round of bond buying to support the economy.

U.S. jobless claims decreased by 23,000 to 369,000 in the week ended Oct. 20 from a revised 392,000 the prior period, the Labor Department reported Thursday in Washington. The median forecast of 48 economists surveyed by Bloomberg called for a drop in claims to 370,000.

Demand for U.S. durable goods climbed 9.9 percent last month, a Commerce Department report showed Thursday in Washington. The median forecast of 77 economists surveyed by Bloomberg called for a 7.5 percent gain in orders.

Oil is rebounding in New York after Wednesday’s drop sent the relative strength index to the lowest level since June 28. Crude climbed from a nine-month low in June when the RSI slid below 30, signaling overselling.

A version of this article appeared in the print edition of The Daily Star on October 26, 2012, on page 5.




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