Oil Prices Surge on Stocks Rally

Crude oil price touched 54 U.S. dollars a barrel on Monday, gaining support from a huge rally in U. S. stocks prompted by White House's latest bank plan and upbeat housing sale data.

Light, sweet crude for May delivery rose to as high as 54.05 dollars a barrel before retreating to settle at 53.80 dollars a barrel, trading up 1.73 dollars, on the New York Mercantile Exchange. Oil prices have gained nearly 34 percent in March.

In London, Brent crude for May delivery rose 2.25 dollars to settle at 53.47 dollars a barrel on the ICE Futures Exchange.

The market sentiment was greatly boosted as investors bet the U. S. government's latest plan to clear financial institutions' bad assets would help to revive consumer and business lending, which is key to the economic recovery. Initially the plan aims to buy half-trillion dollars worth of toxic assets off the balance sheets of banks through combined public and private resources. It could top 1 trillion dollars eventually.

Meanwhile, the U.S. National Association of Realtors said on Monday that sales of existing homes grew 5.1 percent to an annual rate of 4.72 million last month, from 4.49 million units in January. It was the largest sales jump since July 2003.

The recent oil rally started last week after the U.S. Federal Reserve decided to pump 1.2 trillion dollars into the economy, including purchase of long-term treasuries. The Fed move sent the dollar tumbling against the euro and other major currencies, which lured investors to buy commodities like oil and gold.
 

Source: CRIEnglish