Oil rises to near $73 in Asia as investors eye stocks, euro gains

By Alex Kennedy, AP
Tuesday, July 6, 2010

Oil rises to near $73 as stocks, euro gain

SINGAPORE — Oil prices rose to near $73 a barrel Tuesday in Asia, joining gains in stock markets and the euro.

Benchmark crude for August delivery was up 42 cents to $72.55 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract last settled on Friday, losing 81 cents to $72.14.

U.S. markets were closed Monday for the Fourth of July holiday.

Stocks markets in Europe and Asia rose Tuesday while the euro advanced to $1.2594 from $1.2537.

Crude traders often follow equities as a barometer of overall investor sentiment and a stronger euro makes dollar-based commodities such as oil cheaper for investors holding the European currency.

Investor fears of a double-dip recession in Europe and the U.S. later this year after last year’s contraction have been weighing on stocks and commodities in recent weeks. A weaker than expected June jobs report on Friday added to concern the U.S. economic recovery could peter out once massive government spending stimulus ends.

“Nervousness about the broader …. economy and sustainability of demand keep oil prices under the thumb,” Barclays Capital said in a report.

Some analysts are slashing oil price projections despite strong crude demand from emerging economies. Barclays cut its forecast for the average oil price in the fourth quarter to $87 a barrel from the previous estimate of $92 and lowered its prediction for 2011 to $92 from $97.

In other Nymex trading in August contracts, heating oil rose 0.97 cent to $1.9252 a gallon, gasoline gained 0.23 cent to $1.9800 a gallon and natural gas jumped 10.4 cents to $4.791 per 1,000 cubic feet.

Brent crude rose 51 cents to $71.98 a barrel on the ICE futures exchange.

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