Nymex Turns Positive Despite Euro-Zone Worries
Oil prices turned positive in mid-morning trading Friday, rising with stocks despite European debt worries weighing on the market.
Light, sweet crude futures for January delivery were up as much as $1.37, or 1.4%, to $97.34 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures Europe exchange was down 22 cents, or 0.2%, to $107.56.
Futures were down in early-morning trading but turned positive with the opening of the equity markets in New York Friday morning.
The euro zone continues to be plagued by a lack of resolution to sovereign-debt woes among member nations. In a short-term auction Friday, Italy was forced to pay the highest yields on its debt since the euro's inception, after Germany--regarded as the most financially stable euro member--suffered a broken bond auction on Wednesday, selling barely more than half the 10-year bunds it offered.
The euro declined to $1.324 against the dollar, down 0.8%, and the dollar gained 0.6% against a basket of other currencies on the ICE Dollar Index. A rising dollar tends to drive oil prices lower, as the dollar-denominated commodity becomes more expensive for traders using other currencies.
With continued euro turmoil expected in the weeks ahead as a string of other member nations also auction debt, one analyst said euro worries could dominate the oil market the foreseeable future.
"We look for the euro zone to be the primary driver of oil pricing through the balance of this month and well into next," Ritterbusch and Associates said in a note.
Still, the market was bouncing back from early morning lows, with one analyst suggesting encouraging news about the post-Thanksgiving Black Friday shopping frenzy provided further evidence of a U.S. economic recovery.
"The shopping season is off to a good start," said Carl Larry, analyst and president of Oil Outlooks and Opinions. "We are concerned about Europe, but people are getting more confident about the U.S. recovery, and that's going to help oil prices."
Meanwhile, front-month December reformulated gasoline blendstock, or RBOB, traded down 1.56 cents, or 0.6%, at $2.5021 a gallon. December heating oil traded down 1.22 cents, or 0.4%, at $2.9469 a gallon.