Crude oil rose to a five-month high as the dollar extended its decline against the yen and euro and applications for US unemployment benefits unexpectedly fell.
Oil climbed as much as 1.4 per cent after the greenback dropped to a 15-year low against the Japanese currency on signals the US Federal Reserve will expand credit easing to sustain the economic recovery.
US jobless claims dropped by 11,000 to 445,000 in the week ended October 2, the fewest since July 10, Labor Department figures showed today in Washington.
“The bulls are being emboldened by the hammering of the dollar,” said Addison Armstrong, director of market research at Tradition Energy, a Stamford, Connecticut-based procurement adviser.
Crude oil for November delivery rose $1.10, or 1.3 percent, to $84.33 a barrel at 9:01 am on the New York Mercantile Exchange. Futures reached $84.43, the highest level since May 4.
Brent crude oil for November settlement rose 85 cents, or 1 per cent, to $85.91 a barrel on the ICE Futures Europe exchange in London. It reached $85.99, the highest level since May 4.
The dollar fell 0.6 per cent to $1.4017 against the euro after slipping 0.7 per cent yesterday. It declined to 82.11 yen, the lowest level against the Japanese currency since May 1995.
“We’re seeing tremendous dollar weakening,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. “That’s what we saw throughout 2009, which made oil rise from below $40 to $70. This correlation disappeared all year until now, so all commodities are rising.”
