Crude oil rebounded from its lowest level in more than six weeks as equity markets advanced, spurring confidence that the economy is improving and fuel demand will recover.
Oil rose for the first time in four days as U.S. stocks gained amid speculation takeovers will accelerate, boosting the Standard & Poor’s 500 Index after two weeks of losses. Tropical Storm Danielle may become the Atlantic season’s second hurricane within a day, the National Hurricane Center forecast.
“We’re tracking the equities,” said Gene McGillian, an analyst and broker at Tradition Energy, a procurement adviser in Stamford, Connecticut. “We track the perceptions of how the economy is playing out through the equities and the dollar,”
Crude oil for October delivery gained 51 cents, or 0.7 percent, to $74.33 a barrel at 9:54 a.m. on the New York Mercantile Exchange. The price has fallen 6.3 percent this year. The September contract expired at $73.46 on Aug. 20, the lowest closing level since July 6.
The S&P 500 rose 0.9 percent to 1,080.89 after falling to a four-week low last week. The Dow Jones Industrial Average increased 84.54 points, or 0.8 percent, to 10,298.16.
“The correlation is still strong with equities and it’s likely to remain so,” said Roland Stenzel, a crude and carbon trader at E&T Energie Handelsgesellschaft mbH in Vienna. “The market continues to fluctuate.”
Danielle was over the Atlantic at about 850 miles west of the Cape Verde Islands and heading west-northwest at 14 mph on a course that won’t take it near land for at least five days, the hurricane center said in an advisory on its website at about 4:45 a.m. Miami time.
The dollar was little changed against the euro. The European currency was at $1.2722, compared with $1.2712 on Aug. 20.
Brent crude for October delivery rose 56 cents, or 0.8 percent, to $74.82 a barrel on the London-based ICE Futures Europe Exchange.