Oil prices climb ahead of FOMC
Oil prices rebounded today, as did equities, thanks to demand from bargain hunters.
Stock markets in the US suffered their worst daily losses since 2008 yesterday with the Dow Jones average plummeting 5.5 percent, while Brent crude dipped below the psychologically significant US$100 level overnight.
Today, traders were buying into the low prices, driving oil prices back above US$100.
Movements in stock markets serve as an indicator of the strength of the economy, which directly affects the outlook for oil demand.
Futures for crude oil have also benefitted from a decline in the US dollar, which made the dollar denominated crude cheaper for holders of other currencies, lifting demand.
The markets are now bracing for the results the today's meeting of the US Federal Open Market Committee (FOMC). The Fed's comments will be closely watched for indications of possible changes to monetary policy, which may include another round of quantitative easing.
The Fed's assessment of the state of the economy will also be of interest.
US light, sweet crude for September delivery, which is currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), rose 98 cents to US$82.29/barrel in morning trade.
September Brent crude rose 73 cents to US$104.5/barrel on the ICE Exchange this afternoon.
Today's top risers in the oil and gas sector included:
Rockhopper Exploration (LON:RKH), up 33.5 percent at 188.25 pence
Argos Resources (LON:ARG), up 10.5 percent at 22.25 pence
Iofina (LON:IOF), up 8.5 percent at 20.5 pence
Desire Petroleum (LON:DES), up 8.5 percent at 14.93 pence
Gulf Keystone Petroleum (LON:GKP), up 8.5 percent at 109.13 pence
The top fallers were:
Great Eastern Energy (LON:GEEC), down 12 percent at 345 pence
Leed Petroleum (LON:LDP), down 11 percent at 0.08 pence
Independent Resources (LON:IRG), down 10 percent at 32 pence
BPC (LON:BPC), down 9.5 percent at 8.15 pence
Enegi Oil (LON:ENEG), down 9.5 percent at 8.05 pence
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