Crude oil rose to a six-week high in New York after U.S. consumer confidence climbed from an eight-month low and as concern the country will default on its debts sent the dollar lower.
Futures increased as much as 1.4 percent as the Conference Board’s index climbed to 59.5 in July from a revised 57.6 reading the prior month. President Barack Obama cautioned of a “deep economic crisis” without a compromise to avert an Aug. 2 default. The dollar dropped on the warning, bolstering the appeal of dollar-denominated raw materials such as oil.
“The consumer confidence number gave us a good bounce,” said Jason Schenker, president of Prestige Economics LLC in Austin, Texas. “There’s a lot of volatility and it’s hard to know where the market will end up at the end of the session.”
Crude oil for September delivery rose $1.11, or 1.1 percent, to $100.31 a barrel at 12:17 p.m. on the New York Mercantile Exchange. The contract climbed to $100.62, the highest intraday price since June 10. Futures have increased 27 percent in the past year.
Brent oil for September settlement climbed 88 cents, or 0.8 percent, to $118.82 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract traded at a premium of $18.51 a barrel to West Texas Intermediate, the grade traded in New York, down from a record $22.63 on July 14, based on settlement prices.
Obama delivered his message last night in a prime-time television address from the White House, a ritual in moments of crisis and national tragedy. Republican House Speaker John Boehner, speaking from the U.S. Capitol, responded that the president “wants a blank check” to continue government spending that is “sapping the drive of our people.”
New York crude has gained 9.8 percent this year as the Dollar Index, which tracks the U.S. currency against six trading partners, has declined 6.9 percent. The dollar weakened to $1.4505 against the euro from $1.4377 yesterday. It fell to a record low versus the Swiss franc.
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