Oil rose to over $68 a barrel today as stronger than expected earnings results lifted equities and boosted optimism about the economy.
US crude for September delivery rose $1.74 to $68.49 a barrel, with further support coming from the weaker dollar. London Brent crude for October rose $1.22 to $71.76.
Two major US retailers, Home Depot and Target, beat Wall Street expectations today, lifting markets. The results offset offset government data that showed that US housing starts and permits fell unexpectedly in July after increasing in June.
Investors were also eyeing US oil inventory data set to be released tomorrow. Analysts predicted that crude stocks will have risen by 1 million barrels, the fourth weekly build in a row, as higher imports offset a slight increase in refinery activity. Distillate stocks were seen up 400,000 barrels and petrol stocks down 1.4 million barrels.
Traders were also keeping an eye on storms in the Atlantic Basin, although there was no immediate threat seen to US oil installations in the US Gulf of Mexico, home to a quarter of the nation's oil output and 15% of its natural gas production.
Forecasters said tropical rainstorm Ana may regain strength over the warm water of the eastern Gulf of Mexico later this week, but has little chance of becoming a cyclone over the next day or so as it crosses Haiti and Cuba.
Hurricane Bill, the first hurricane of the 2009 Atlantic season, headed west-northwest over the open ocean today, but it was uncertain whether it could threaten the northeast US coast by Sunday, far from Gulf Coast oil installations.
