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Tropical Storm Danielle 2010

August 23, 2010 by staff 

Tropical Storm Danielle 2010, Crude oil rebounded from its lowest level in more than six weeks, in advance of the equity markets prompted confidence that fuel demand may recover.

Ranked as oil shares rallied from a minimum of one month in Europe and USA Index futures rose. Tropical Storm Danielle can become the second hurricane of the Atlantic season in one day, the U.S. National Hurricane Center.

Crude for October delivery rose as much as 60 cents, or 0.8 percent, at 74.42 and a barrel on the New York Mercantile Exchange and was trading at 74.32 and 13:07 London time. The September contract fell 97 cents to 73.46 and on August 20, when it expired, the lowest level since 06 July. Futures fell 2.6 percent last week. Brent crude for October delivery rose 59 cents to 74.85 and a barrel on London’s ICE Futures exchange in Europe.

“The correlation is still strong with equities and is likely to remain so,” said Roland Stenzel, an oil merchant and carbon in E & T Energie Handelsgesellschaft mbH in Vienna. “The market continues to fluctuate.”

The Europe Stoxx 600 Index rose 0.8 percent at 1:10 pm in London, while futures on the Standard & Poor’s 500 edged up 0.6 percent.

Tropical Storm Danielle can become the second hurricane of the Atlantic season in one day, the center said. Danielle’s maximum sustained winds strengthened to 60 miles (95 kilometers) an hour early today, 50 mph over six hours before the U.S. National Hurricane Center said in an advisory on its website at about 4:45 am Miami time. The system was over the Atlantic Ocean, about 850 kilometers west of the islands of Cape Verde and west-northwest at 14 kilometers per hour on a course that does not take near the ground for at least five days.

GASOLINE

Hedge funds cut bullish bets on oil by the most in almost four years as oil stocks were above the highest since 1990. Hedge funds and other large speculators reduced bets on rising prices by 74 percent the week ended Aug. 17, the most since October 2006, the Commodity Futures Trading Commission reported on 20 August. Gasoline has fallen 21 percent since reaching its 2010 high of 2.4351 and a gallon on the New York Mercantile Exchange on 3 May.

“It is possible that prices will recover in the short term, but should still remain low due to economic concerns,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, in a telephone interview. “The need for diversification is to keep investors investing their money in the market and the speculative interest is accelerating at the lower end of the trading range.”

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