Oil rose from its lowest in a month as the dollar dropped against the euro, spurring demand for commodities as a hedge against inflation.
An Energy Department report tomorrow is forecast to show that crude inventories climbed from the highest level since 1990. The euro, near a five-week low against the dollar, rose as German investor confidence turned positive in April for the first time in almost two years.
“This latest surge in the euro-dollar is drawing investors’ attention away from bearish oil market fundamentals,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “Prices are going to yo-yo a bit, but largely trade sideways ahead of the inventory figures.”
An Energy Department report tomorrow will show that crude inventories, now at their highest since 1990, rose last week, according to a Bloomberg News survey.
Crude oil for May delivery was at $46.10 a barrel, 22 cents higher in electronic trading on the New York Mercantile Exchange at 10:35 am London time. It earlier fell as much as 69 cents, or 1.5 per cent, to $45.19, the lowest since March 16.
Yesterday, crude futures fell $4.45, or 8.8 per cent, to $45.88 a barrel, the lowest settlement since March 11. It was the biggest drop since March 2. The May contract expires today.
The more-active June futures were at $48.74 a barrel, 23 cents higher, at 10:35 am in London. The futures dropped $3.96, or 7.5 per cent, to $48.51 a barrel yesterday.
The ZEW Center for European Economic Research in Mannheim, Germany, said its index of investor and analyst expectations rose to 13 from minus 3.5 in March. That’s the first positive reading and the index’s highest level since June 2007. Economists expected a reading of 2, according to the median of 35 forecasts in a Bloomberg News survey.