Crude Oil Futures Extend Gains, Brent Remains Lower

Forexpros – Crude oil futures extended gains on Monday, hitting a two-day high as a broadly weaker U.S. dollar boosted the appeal of commodities, while Brent futures held on to losses as developments in Libya boosted speculation oil production in the country would resume in the near-term.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at USD84.14 a barrel during U.S. morning trade, jumping 1.69%.  

It earlier rose as much as 2.1% to trade at USD84.42 a barrel, the highest price since August 18.

The greenback came under pressure amid speculation the U.S. economy may require further stimulus by the Federal Reserve, as markets looked ahead to a much-anticipated speech by Fed Chief Ben Bernanke on Friday.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.41% to hit 73.92.

Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for October delivery dropped 1.5% to trade at USD107.55 a barrel.

The spread between the two contracts narrowed to USD23.41, down from Friday’s record high of USD26.42.

Rebel forces entered Tripoli over the weekend, meeting little resistance from troops loyal to embattled leader Muammar Gaddafi, as they took over key parts of the capital.

According to Libyan state television, rebel forces detained Gaddafi’s eldest son, Saif al-Islam earlier Monday. Another son of Gaddafi, Mohammed, was under house arrest, reports said.

Meanwhile, Libya's rebel oil firm Arabian Gulf Oil Company said it was “technically ready” to resume oil production in its two eastern fields, while the largest international oil company operating in Libya, Italy’s Eni returned to the country to look into restarting oil facilities, according to Italian Foreign Minister Franco Frattini.   

Libya, Africa’s biggest holder of crude oil reserves, has the capacity to produce roughly 1.6 million barrels of crude a day, nearly 2% of global supply. The country has produced approximately 100,000 barrels of oil per day since the civil war began in February.




Forexpros - Forex Pros offers a diverse set of professional tools for Forex, Futures and CFDs. These include real-time data streams, technical and fundamental analysis by in-house experts, and a widely used economic calendar and Forex News.