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Petroleum industry

Crude Oil Prices Rise Amid Positive Economic Indicators

Strategic Insights

— 2 min read

A surge in U.S. economic indicators, including manufacturing and housing data, pushed crude oil prices above $78 a barrel on the New York Mercantile Exchange on Monday. The Institute for Supply Management's manufacturing index jumped to 55.7 in October, exceeding analyst expectations and re-igniting economic optimism. However, concerns over the sustainability of the U.S. recovery lingered, with the housing gains seen as partly fueled by a tax credit to first-time home buyers set to expire in the fourth quarter. The dollar's gyrations also influenced oil prices, with the commodity typically rising when the dollar weakens.

Key Takeaways:

  • Crude oil futures rose to over $78 a barrel, buoyed by positive U.S. economic indicators, including a jump in the Institute for Supply Management's manufacturing index to 55.7 in October.
  • The National Association of Realtors' index for pending sales of previously owned homes rose 6.1% to 110.1 in September, marking the eighth consecutive increase.
  • Concerns over the sustainability of the U.S. recovery lingered, with the housing gains seen as partly fueled by a tax credit to first-time home buyers set to expire in the fourth quarter.
  • The dollar's gyrations also influenced oil prices, with the commodity typically rising when the dollar weakens.
  • The U.S. Federal Reserve meeting on Wednesday will be closely watched, with any signals that the government intends to end its fiscal-stimulus efforts potentially capping the economic recovery.
  • OPEC boosted its crude-oil output by an extra 190,000 barrels a day in October, amid continued increases in crude-oil production and tepid oil consumption.

Statistics:

  • Crude oil futures rose $1.13, or 1.5%, to $78.13 a barrel on the New York Mercantile Exchange.
  • Brent crude on the ICE futures exchange closed $1.35, or 1.8% higher, at $76.55 a barrel.
  • The Institute for Supply Management's manufacturing index jumped to 55.7 in October from 52.6 in September and 52.9 in August.
  • The National Association of Realtors' index for pending sales of previously owned homes rose 6.1% to 110.1 in September, marking the eighth consecutive increase.
  • OPEC boosted its crude-oil output by an extra 190,000 barrels a day, or 0.7%, in October, to 26.595 million barrels a day.

Sources:

  • Dow Jones Commodities News via Comtex (Nov 02, 2009)
  • Institute for Supply Management (ISM) Manufacturing Index (October 2009)
  • National Association of Realtors (NAR) Index for Pending Sales of Previously Owned Homes (September 2009)
  • Commerce Department Report on Construction Spending (September 2009)
  • OPEC Crude Oil Output Report (October 2009)

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