Current Oil Prices Rebound Near $97

The per barrel oil prices rebounded to close to $97 per barrel, obtaining its signal from Europe’s increasing stock markets.

On the NYMEX, the U.S. benchmark for delivery in March was 72 cents higher at a current crude price of $96.89 per barrel. The contract shed $1.60 to end at $96.17 per barrel during yesterday’s trading.

The prices of oil had consistently increased since trading close to $86 per barrel in the middle of December on expectations for the global economy’s improvement. However, the stock indices of the U.S. just posted huge declines in the midst of worries regarding political instability in Spain and Italy.

But, recently published data shows increasing activity in the sectors of manufacturing and services in the eurozone, relieving investors of those those worries and reversing the oil price decline.

The drop should go on in the short-term if the financial markets’ correction pushes through. However, prices are not expected to fall in the long-term, according to a report from Frankfurt’s Commerzbank. The risks on the inventory side still exist: reducing supplies from OPEC and the improving outlook of the global economy imply that a fall in the long term is not likely to occur.

Moreover, a weaker U.S. currency factored into the increasing prices of oil by making crude less expensive and a highly attractive investment for traders holding other currencies. The euro is recently trading higher at $1.3540 compared to yesterday’s $1.3505.

In London, Brent was 95 cents higher at $116.55 per barrel.

In other NYMEX trading, wholesale gasoline moved 3.45 cents up to $3.046 a gallon. Heating oil also moved higher by 3.2 cents to $3.186 a gallon. Natural gas increased 3.7 cents to $3.352 per thousand cubic feet.