RTTNews - With traders reacting to some better than expected housing data as well as cautious optimism from Federal Reserve Chairman Ben Bernanke, the price of oil saw notable strength on Friday after ending the previous session in the red.
After ending Thursday's trading down $0.92 at $72.91 a barrel, crude for October delivery ended its first day as the front-month contract up $0.98 at $73.89 a barrel. The price of oil rose as high as $74.72 a barrel before giving back some ground.
The price increase came as traders expressed renewed optimism about the outlook for an economic recovery in the second half of the year, which would lead to increased oil demand.
A report from the National Association of Realtors showed that existing home sales rose 7.2 percent to an annual rate of 5.24 million units in July from a 4.89 million-unit rate in June. Economists had been expecting a more modest increase to a 5.0 million-unit rate.
NAR noted that the increase in sales was the largest monthly gain on record for the total existing-home sales series dating back to 1999. With the increase, existing home sales rose for the fourth consecutive month, the first four-month winning streak since June of 2004.
Traders also looked to comments from Federal Reserve Chairman Ben Bernanke, who said that economic activity appears to be leveling out, both in the United States and abroad, while adding that prospects for a return to growth in the near term appear good.
However, Bernanke warned that the recovery might be sluggish at first, with unemployment declining only gradually from high levels.
In other commodities trading, gold for December delivery closed up $13 at $954.70 an ounce after ending Thursday's trading down $3.10 at $941.70 an ounce. During the session, the price of the precious metal rose as high as $959.90 an ounce.
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