Oil prices rose this afternoon, tracking gains in stock markets, which came after today’s German business confidence data topped expectations.
Trading volumes were low as most traders in the US took the day off for the Thanksgiving holiday.
European stock markets reversed earlier losses this afternoon after the German Ifo business climate index for November came in at 106.4, up from 106.4 in the previous month, while expectations were for a decline to 105.1.
The data provided some comfort for jittery investors, which were unnerved by the disastrous results of yesterday’s auction of German bunds.
The euro zone’s largest economy offered €6 billion in ten year noted, but received bids for only €3.9 billion. As a result, yields on German bonds jumped to over two percent.
It has also been reported that members of Germany’s ruling coalition have softened its stance on issuing common euro zone bonds and could accept the proposal under certain conditions.
Chancellor Angela Merkel has previously denounced the idea of joint euro zone bonds “inappropriate”.
Elsewhere in Europe, the UK’s Office for National Statistics left its third quarter GDP growth estimate unchanged at 0.5 percent compared to growth of just 0.1 percent in the previous three months.
Besides the German and UK economic data, demand for crude oil futures was supported by yesterday’s upbeat US inventories report. The US Department of Energy reported that oil stockpiles shed a massive 6.2 million barrels last week, suggesting that energy demand in the US was on the rise.
US light, sweet crude for January delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), rose 43 cents to US$ 96.61/barrel.
January Brent crude added 49 cents to reach US$107.55/barrel on the ICE Exchange this afternoon.
Today’s top risers in the sector were:
Gulf Keystone Petroleum (LON:GKP), up 12 percent at 164.5 pence at midday
Aurelian Oil & Gas (LON:AUL), up 4.5 percent at 17 pence
Petroceltic International (LON:PCI), up 4.5 percent at 6.16 pence
Nighthawk Energy (LON:HAWK), up 4.5 percent at 2.93 pence
Max Petroleum (LON:MXP), up 3 percent at 12.88 pence
The top fallers were:
Woburn Energy (LON:WBN), down 14.5 percent at 1.5 pence at midday
BowLeven (LON:BLVN), down 10 percent at 66.5 pence
Sirius Petroleum (LON:SRSP), down 9.5 percent at 3.5 pence
San Leon Energy (LON:SLE), down 8 percent at 9.2 pence
Argos Resources (LON:ARG), down 8 percent at 18.68 pence
Oil prices rise on German data, US inventories
Last updated: 01:37 25 Nov 2011 AEDT, First published: 02:37 25 Nov 2011 AEDT