U.S. crude oil futures jumped to settle at a three-week high Friday, on news of a deal at the European leaders summit meeting where the European Union will take urgent action to help stabilize the Spanish and Italian bond markets and the ailing eurozone banking sector. With today's surge in prices, crude oil recorded its biggest single day percentage gain since March 2009.
The dollar also dropped against most major currencies, making it attractive to buy the commodity which is mostly traded in dollar denominations internationally. Meanwhile, the euro climbed to its highest since October.
Light Sweet Crude Oil futures for August delivery, surged $7.27 or 9.4 percent to close at $84.96 a barrel on the New York Mercantile Exchange Friday.
Crude prices scaled a high of $85.28 a barrel intraday and a low of $78.28.
Oil prices dived to an 8-month low yesterday, amid concerns over the outcome of the European Union summit meeting that is underway, a strong U.S. dollar and as well on declines in U.S. equity markets
The dollar index, which tracks the U.S. unit against six major currencies, was trading at 81.651 on Friday, down from 82.793 in North American trade late Thursday. The dollar scaled a high of 82.83 intraday and a low of 82.24.
The euro traded significantly higher against the dollar at $1.2655 on Friday, as compared to $1.2429 late Thursday in North America. The euro scaled a high of $1.2692 intraday and a low of 1.2435.
In economic news, the U.S. Commerce Department said personal income increased by $25.4 billion or 0.2 percent for May, with disposable incomes increasing by the same 0.2 percent margin. Most economists expected personal incomes to rise slightly faster, at 0.3 percent.
The Chicago-area business activity saw a modest acceleration in the pace of growth in the month of June, a report by the Institute for Supply Management - Chicago showed Friday. Nevertheless, the index of activity crept up by less what economists had expected.
The Chicago business barometer inched up to 52.9 in June from 52.7 in May, with a reading above 50 indicating an increase in activity. Economists expected the index to climb to a reading of 53.1.
Elsewhere, the eurozone annual inflation remained unchanged at 2.4 percent in June, flash estimate released by Eurostat showed. Though the rate remained comfortably above the central bank's target, the European Central Bank feels that there is no inflation risk at present in the euro area. The June inflation rate was the lowest since February 2011 and was in line with economists' expectations.
Meanwhile, German retail sales fell unexpectedly in May for the second month in a row. Sales were down by real 0.3 percent month-on-month in May, marking a second consecutive monthly fall, the latest figures from the Federal Statistical Office showed. The outcome was in contrast to expectations for an increase of 0.2 percent and follows a 0.2 percent drop in April.
by RTT Staff Writer
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