Friday, May 2, 2008

New York Oil Increases by $3, Largest Gain in Month

June delivery of crude oil increased $3.80 to settle at $116.32 a barrel on the Nymex Friday, it's first rise in four days, and the largest gain in a month.

For Brent crude, June delivery gained even more, as it grew by $4.06 percent to $114.56 on London's ICE Futures Europe exchange. That's the largest increase since March 18.

Although some blamed the air strike by Turkey on Kurdish rebels in Iraq as part of the reason for the surge, it couldn't account for the whole gain. It's probably investors getting back into the market, taking advantage of lower prices.

"News of the Turkish air attacks turned us around overnight, but it doesn't explain a $3 gain," said Tom Bentz, a broker at BNP Paribas in New York. "More than any headline in particular, we are just seeing investors come in to take advantage of the dip in prices this week."


This is one of the reasons OPEC continues to resist increasing production, as they primarily blame the increase in oil prices on speculators of oil futures.

"OPEC will not increase production of crude oil because what is happening now is not an increase in oil demand, but heavy speculation on oil futures," Qatari Oil Minister Abdullah al-Attiyah said today. "That's what's making oil prices so high."

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