Crude reaches $81 on bullish US data, stronger euro

Crude prices were on the rise today with US benchmark crude eclipsing US$81/barrel on the New York Mercantile Exchange (NYMEX).
Oil was lifted by an improved demand outlook amid a rally in European and Asian stock markets and bullish US jobless claims data that showed a steeper than expected decline of 14,000 in initial jobless claims last week to 442,000.
Meanwhile, the euro strengthened today, gainin on the US dollar after European Union leaders agreed on a joint €30 million bailout package with the International Monetary Fund (IMF) for debt-laden Greece, easing worries over its fiscal crisis, which has been weighing on Europe’s single currency for weeks.
However, the deal did not significantly improve the long-term outlook for Greece’s debt situation and the euro’s gains were limited.
A stronger US dollar makes dollar denominated commodities including crude more expensive for holders of other currencies, curbing demand.
Crude prices have been under pressure from inventories reports that were released earlier this week showed a substantial build-up in US stockpiles. US Energy Information Administration (EIA) reported that crude inventories increased by 7.2 mmbbls (million barrels) compared to an expected rise of just 1.7 mmbbls. EIA said that gasoline inventories declined by 2.7 mmbbls, while distillates, which include heating oil, dropped 2.4 mmbbls.
Earlie rin the week, the American Petroleum Institute (API) reported a 7.5 mmbbls rise in crude stockpiles, adding that gasoline stocks fell 81,000 barrels, while distillates declined by 2.5 mmbbls.
May Brent Crude improved to US$80.28/barrel, while US light, sweet crude reached US$81/barrel.
Blue chip oil and gas producers didn’t show much movement today. BG Group (LSE: BG) declined 1.8%, while supermajor BP (LSE: BP) followed with a small loss. Shell (LSE: RDSB) and Tullow Oil (LSE: TLW) were flat. Cairn Energy (LSE: CNE) outperformed its peers, adding less than 1%.
Amec (LSE: AMEC) posted a marginal loss, while fellow oil and gas engineering firm Petrofac (LSE: PFC) was unmoved.
Midcaps mostly rose. Premier Oil (LSE: PMO) led the way with a 3.4% gain. Salamander Energy (LSE: SMDR) followed, tacking on 2.3%. Melrose Resources (LSE: MRS) and Soco International (LSE: SIA) added nearly 1%, while Dragon Oil (LSE: DGO) and Heritage Oil (LSE: HOIL) were flat. Dana Petroleum (LSE: DNX) shed less than 1% and JKX Oil & Gas (LSE: JKX) was at the bottom of the pile with a 1.2% loss.
Services companies headed in different directions as while Wood Group (LSE: WG) posted a small gain, Wellstream Holdings (LSE: WSM) declined 1.4%.
Western Europe operating oil and gas company Northern Petroleum (AIM: NOP) and Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) dropped 5.5% and 4% respectively.

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