Crude-oil futures settled at a 12-week high Tuesday, using the previous session’s steep gains as a springboard for further advances even in the face of broad market weakness.
Crude for December delivery added $1.90, or 2.1 percent, to end at $93.17 a barrel on the New York Mercantile Exchange. Prices rose as high as $94.65 a barrel ahead of the start of US floor trading, and the settlement was oil’s highest since Aug. 2.
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Tuesday’s settlement above $91 a barrel served as a technical launching pad for Wednesday’s gains. Losses for Brent, Europe’s benchmark contract, also provided a technical background for the New York-based oil contract to rally.
Nymex oil “represented a bargain for the past three months or so,” but in the past two sessions traders have decided to recognize its value, according to Peter Beutel, president of trading advisory firm Cameron Hanover.
The difference in price between the two benchmarks has hit records in recent months, with Brent, historically cheaper, outpacing Nymex oil.
The spreads between the two global benchmarks had been too high and uncalled for in any case, and the growing doubts about Europe’s debt-crisis summit may have contributed to pressure on Brent, Beutel said.
Markets have been optimistic that Europe will be able to stave off its sovereign-debt crisis with last weekend’s summit and the next gathering scheduled for Wednesday.
That confidence, however, was dented on news that eurozone finance ministers won’t meet as expected, even though their top leaders will still get together.
The gathering is hoped to be one of the final chapters of Europe’s debt saga, but markets took the absence of the finance ministers hard, with US stocks sharply lower.
That canceling of the finance ministers’ meeting was taken as a sign that key details in the much-expected sweeping plan to stop the crisis have not been agreed upon.
Brent for December delivery declined 53 cents, or 0.5 percent, to $110.92 a barrel on ICE Futures in London.