Oil prices rise on strong German and US data
Positive news that came out in Europe and the US buoyed oil prices this afternoon, helping crude oil futures in London and New York to gains of over US$2 per barrel.
Starting with Europe, today's German data topped expectations with the Ifo business sentiment index rallying from 106.6 in November to 107.2 this month and the GfK consumer confidence gauge for January holding steady at 5.6, while analysts projected a decline.
The results of today's Spanish debt auction provided more relief for jittery investors. Spain managed to raise €5.6 billion, ahead of its initial target of €4.5 billion, while seeing yields on its three and six month notes falling sharply.
Moving to the US, the Commerce Department reported that housing starts jumped 9.3 percent to an annualised rate in November to hit 19 month highs in the latest sign that the economic recovery in the world's largest energy consumer is back on track.
The adjusted annual rate of housing starts reached 685,000, while a survey by Bloomberg News projected an increase to 635,000.
Demand for oil received more support from a decline in the US dollar, which has made the dollar-denominated crude cheaper for holders of other currencies. The safe-haven greenback declined as the euro got a boost from the German data and the Spanish auction.
Traders are now looking to tomorrow's US inventories report from the Department of Energy. Last week's figures revealed a decline of 1.9 million barrels, suggesting that oil demand in the US was on the rise.
US light, sweet crude for February delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), rallied US$2.25 to US$96.13/barrel in morning trade in New York.
February Brent crude added US$2.43 to reach US$106.22/barrel on the ICE Exchange this afternoon.
Today's top risers in the oil and gas sector were:
Europa Oil & Gas (LON:EOG), up 18 percent at 6.93 pence at midday
Resaca Exploitation (LON:RSOX), up 6 percent at 0.901 pence
Falkland Oil & Gas (LON:FOGL), up 5.5 percent at 49.99 pence
Sirius Petroleum (LON:SRSP), up 4.5 percent at 4.31 pence
Regal Petroleum (LON:RPT), up 4.5 percent at 31.56 pence
The top fallers were:
Silvermere Energy (LON:SLME), down 31 percent at 14.5 pence at midday
TXO (LON:TXO), down 13 percent at 0.67 pence
Woburn Energy (LON:WBN), down 10.5 percent at 1.3 pence
Gold Oil (LON:GOO), down 7 percent at 2.53 pence
Matra Petroleum (LON:MTA), down 6 percent at 0.586 pence
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