Oil prices reach $73 as equities in Asia, US and Europe bounce back

Oil prices followed the usual pattern today, moving alongside equity markets, which were headed north after the Reserve Bank of Australia commented that growth in Latin America and Asia was strong to ease worries over the possibility of a double dip recession that has kept the markets under pressure over the recent weeks.
The Reserve Bank left the interest rate unchanged at 4.5%, also stating that the economic growth in the US and Europe was slowing.
Marks in both the US and Europe were in selling mode over the past two weeks, capping off last week with yet more losses on a disappointing employment update that came out in the US, showing a drop of 125,000 mostly due to the loss of temporary census jobs, and a lesser than expected 83,000 jobs created by the private sector. However, not all news was negative as the unemployment rate in the US declined to 9.5% from 9.7%k, while an increase was expected. This, coupled with negative trends in US and Chinese manufacturing, pushed the Dow Jones index in the US and the FTSE 100 below key 10,000 and 5,000 marks respectively.

Today’s comments from the Australian central bank and gains in Asian markets proved to be enough to spark a rally that saw the FTSE 100 gain 2.3%, while the Dow Jones Industrial Average is currently projected to add 1.1% in early trade today.

Crude has recently been moving along with the stocks as investors have been taking clues about the outlook for oil demand from movements in share prices.
This week’s inventories reports from the American Petroleum Institute (API) and Energy Information Administration (EIA) will show whether US consumption remained strong last week after crude stockpiles declined the week before, signalling higher demand from the world’s leading energy consumer.
August Brent Crude rose to US$72.57/barrel, while US light, sweet crude for August delivery improved to US$73.10/barrel.
Blue chip oil and gas producers were on the rise today. Tullow Oil (LON:TLW) and Cairn Energy (LON:CNE) led the way, advancing 3.6% and 3.2% respectively. BG Group (LON:BG) followed, tacking on nearly 2%. Supermajors BP (LON:BP) and Shell (LON:RDSB) added 2.5% and 1.3%.
Oil and gas engineering firms Amec (LON:AMEC) and Petrofac (LON:PFC) gained 2% and 2.5% respectively.
Midcaps followed with the exception of Salamander Energy (LON:SMDR), which declined 1%. Dana Petroleum (LON:DNX) also failed to advance, staying at the opening level.
Heritage Oil (LON:HOIL) took the lead with a 6% gain. Dragon Oil (LON:DGO) climbed 3.1% and JKX Oil & Gas (LON:JKX) added 2%. Premier Oil (LON:PMO) lagged behind with a marginal gain.
Service companies headed in different directions as while wood Group surged 4.4%, Wellstream Holdings (LON:WSM) posted a small decline.
North American based explorer Nighthawk Energy (LON:HAWK) led the juniors, surging 14%. EU operating Rome-based oil junior Mediterranean Oil & Gas (LON:MOG) also did well, rallying 11%. Mongolia-focused Petro Matad Ltd (LON:MATD) followed with a 7% gain.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LON:GOO) and energy investor Xtract Energy PLC (LON:XTR) were in the red with losses of 7% and 6% respectively.