Oil hit an eight month high on Tuesday and was on track to post its largest quarterly gain since 1990 as optimism for an economic recovery rather than clear news flow continued to drive crude prices.
The energy market defied predications of a quiet US holiday trading period as US crude again broke through the $72 a barrel level, adding to a 3.7 per cent rise in the previous session.
“Crude posted a strong advance yesterday proving that among all those warnings of a cautious approach, optimism about the economic outlook is still making headlines,” said Marius Paun of ODL. “The employment report on Thursday is likely to be the main influencing factor for the energy complex offering guidance on the short term.”
A softer dollar added to crude’s upward momentum, with a weaker greenback boosting the appeal of dollar-denominated commodities such as oil and gold.
Nymex West Texas Intermediate futures for August delivery, the US benchmark, rose 56 cents to $72.03, while ICE August Brent gained 66 cents to $71.65.
Earlier WTI hit $73.38 a barrel, the highest level since late October last year.
Spot gold rose 0.4 per cent to $940.50 a troy ounce, the sheen of the yellow metal enhanced by the dollar’s falls, while base metals were broadly stronger.
“Gold has stabilised against the euro over the past few sessions, recovering from a plunge at the start of last week, but sill in an overall lower trend from recent highs at the start of June,” said analysts at UBS.
Copper rose 0.8 per cent to $5143 per tonne, with aluminium up 0.7 per cent to $1651a tonne.