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Oil Surges to 17-Month High on Signs of U.S. Economic Growth

April 5 (Bloomberg) — Crude oil surged to the highest level in 17 months as growth in American jobs and service industries signaled that the economy is recovering from the worst recession since the 1930s.

Oil climbed 2.1 percent amid optimism that fuel demand will increase with an economic rebound. The U.S. is the world’s largest energy-consuming country. The Standard & Poor’s 500 Index rose to an 18-month high.

“The market is in full embrace of the recovery thesis and is pricing it in accordingly,” said John Kilduff, a partner at Round Earth Capital, a New York-based hedge fund that focuses on food and energy commodities. “It’s enthusiasm that we’re coming out of this recession.”

Crude oil for May delivery increased $1.75 to settle at $86.62 a barrel on the New York Mercantile Exchange, the highest closing price since Oct. 8, 2008. The contract has risen for five consecutive sessions, the longest stretch in six weeks. Crude has climbed 65 percent in the past year.

Oil traded within a range of $68 to $84 a barrel in the six months ended March 31. Prices rose the past two months as improved investor confidence boosted world equity markets.

The S&P 500 gained 0.8 percent to 1,187.44 in New York, also on the jobs report.

U.S. payrolls rose by 162,000 last month, the Labor Department reported April 2, when U.S. financial markets were closed for the Good Friday holiday. The report included 48,000 temporary workers hired by the government to conduct the Census.


Oil is one of the main factor to watch in a economy because to a certain accuracy, it does show the bullishness or bearishness of the market. However, oil has been speculated quite badly during the 2008 bull run.

Having too high a oil price will not help the economy either cos people will have to spend more on oil and less on other things.

USO is one of the nyse counter and seems to be a ascending triangle in making. We can use the breakout strategy to enter this counter. Oil will also drive the gas and commodities up. Take a look at UNG for entry as the downward trend has only been broken 2 days ago.

Commodities stock such as StraitsAsia, GoldenAgri and IndoAgri seems to be weakened by the major 4 day run  with a spinning top and might have to consolidate to go higher.


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