Oil edged higher for the first time in four days in New York as an advance in US equities signaled the economic recovery will accelerate.
Crude gained as much as 0.8 per cent, erasing an earlier drop, as the Standard & Poor’s 500 Index increased and St. Louis Federal Reserve President James Bullard indicated that the Fed may be able to cut about $US100 billion from its plan to buy Treasury securities as the economy rebounds.
“We’re seeing equities move higher, and that’s giving a little bit of positive sentiment toward crude,” said Matt Smith, a commodities analyst for Summit Energy Services Inc. in Louisville, Kentucky. “The remarks by Mr Bullard indicate the potential for the economy is looking a little better.”
Crude for May delivery gained 41 US cents, or 0.4 per cent, to $US104.39 a barrel on the New York Mercantile Exchange. Oil has risen 27 per cent in the past year.
Brent crude for May settlement on the London-based ICE Futures Europe exchange rose 40 US cents, or 0.3 per cent, to $US115.20 a barrel.
The S&P 500 gained 0.4 per cent to 1315.94, and the Dow Jones Industrial Average rose 0.6 per cent to 12,265.28.
If uncertainties in the global economy are resolved, the Fed could “pull up a little bit shy of our total of $US600 billion,” in planned purchases of Treasury securities, a measure known as quantitative easing, Bullard told reporters today in Prague, where he was attending a financial conference.
“I think it could be on the order of $US100 billion less than what we initially thought,” he said.