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AnalysisCrude oil gained for the fourth day on Tuesday on improved outlook, weak dollar, and buoyant equities.

 

Oil added 2% yesterday touching 7-month high as global economies are showing signs of recovery which suggests higher future demand on energy products. The data released recently from large economies in addition to optimistic reports released this week by OPEC, API, and EIA are providing further clues that the recession is abating.

 

Moreover, the U.S. dollar retreated the previous day retracing some of Friday's gains. The dollar index, a measure of the dollar's movements versus a basket of major currencies, surged slightly today to 76.22 from the opening at 76.18. The stock's bounce along with the upbeat earnings by large companies damped demand on lower-yielding assets.

 

Last night, U.S. stocks continued its rally with S&P 500 rose to 12-month high and Asian stocks climbed today, where MSCI Asia Pacific Index soared to 13-month high. This week large companies are going to release earnings with expectations to show progress.

 

The American Petroleum Institute (API) will be released on Wednesday, while the EIA report will be released on Thursday due to Columbus Holiday in the U.S. yesterday.

 

Now, oil is traded at $73.45 recording a high of $73.62 and a low of $72.80, whereas the contract on Friday added $1.50 closing at $73.27, while recording a high of $73.84 per barrel and a low of $72.05 per barrel.