Oil near $91, following healthy gains in stocks
An oilfield worker inspects his haul vehicle near Fort McMurray, Alta., on July 9, 2008. THE CANADIAN PRESS/Jeff McIntosh
NEW YORK, N.Y. - Oil rose for the first time in four days Tuesday, but traders questioned whether the gains were sustainable.
Benchmark West Texas Intermediate crude oil for April delivery rose 70 cents to finish at US$90.82 a barrel on the New York Mercantile Exchange. Brent crude, used to price many kinds of oil imported by U.S. refineries, gained US$1.52 to end at $111.61 a barrel on the ICE Futures exchange in London.
Oil rode the coattails of global stock markets. Stocks rallied as Chinese Premier Wen Jiabao confirmed the country's annual growth target of 7.5 per cent and retail sales rose in Europe. A number of European indexes rose 2 per cent or more. In the U.S., the Dow Jones industrial average shot to a record high.
Oil is still down more than 6 per cent over the past two weeks. That's helped push down prices at the gas pump. The average price for a gallon of gas fell a penny overnight to US$3.74, and is now 3 cents cheaper than a year ago.
Some traders think Tuesday's oil trading is just a pause in a downward trend.
"The ability of Brent and WTI to rebound back to above US$110 and US$90 suggests to us a bear market that could be in a pause for a while before resuming a decline that could carry down to about the US$104 and US$85 areas within the next week or two," said Jim Ritterbusch of the energy consulting group Ritterbusch and Associates.
As this week goes along, oil traders will be monitoring fresh information on U.S. supplies of crude and refined products and the latest government data on hiring.
In other energy futures trading on the Nymex:
— Wholesale gasoline added 5 cents to finish at US$3.15 a gallon (3.79 litres).
— Heating oil rose 5 cents to end at US$2.97 a gallon (3.79 litres).
— Natural gas was flat at US$3.53 per 1,000 cubic feet.
(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)
Pamela Sampson in Bangkok and Pablo Gorondi in Budapest contributed to this report.