
(Bloomberg) -- Crude oil surged more than $2 a barrel as equities and
the euro rallied after China affirmed its commitment to investing in Europe.
Oil climbed as much as 4.1 percent as China denied as “groundless” a report that it’s reviewing its euro holdings and the nation’s sovereign-wealth fund said it’s maintaining European assets. The euro gained 1 percent, boosting the appeal of commodities as an alternative to the dollar.
“If China were really looking to offload euro-denominated debt, that would put downward pressure on the euro, and
the euro-dollar rate has been one of the key factors in oil prices,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington.
Economic NewsThe Commerce Department reported the U.S. economy grew for a third consecutive quarter and the Labor Department said jobless claims declined, signals that energy demand may recover with an economic rebound.
U.S. GDP increased by an annual rate of 3 percent in the first quarter, a slower pace than the 3.2 percent gain calculated last month. The figure was also less than the 3.4 percent median estimate of 79 economists surveyed by Bloomberg News.
Initial jobless claims fell by 14,000 to 460,000 in the week ended May 22. Economists had forecast that jobless claims would drop to 455,000.
“The big news is U.S. macroeconomic data is still solid,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant.
“Growth is the story.”
The Organization for Economic Cooperation and Development forecast yesterday that the global economy will expand 4.6 percent this year and 4.5 percent in 2011, compared with an average of 3.7 percent during the decade through 2006 as growth in emerging economies outpaces debt-burdened developed countries.
‘Technical Rebound’
Oil jumped 4 percent in New York yesterday, the most since September, after a Commerce Department report showed U.S. durable goods orders rose for the fourth month in five in April.
“We’re experiencing a technical rebound after a massive selloff, and we expect this to continue to $75 to $77,” said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt.
“In the medium term, we expect demand will not keep pace with supply and oil will fall again below $70.”