Oil extends rally to above $67 in Asia as stocks jump, fueling optimism on economy

Oil extends rally to above $67 as stocks jump

SINGAPORE — Oil prices jumped above $67 a barrel Friday in Asia, extending a big rally from the previous day as surging stock markets fueled investor optimism.

Benchmark crude for September delivery was up 62 cents to $67.56 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. On Thursday, the contract rose $3.59, or 5.6 percent, to settle at $66.94.

Traders have gotten whiplash this week as prices jerked up and down on investor uncertainty about the strength of the global economic recovery.

“Sentiment is very fragile,” said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. “Going forward, we’re going to be looking at a seesawing market.”

Crude investors were cheered by a jump in U.S. stocks on Wednesday. The Dow Jones industrial average rose 0.9 percent.

While the worst of a severe recession may be over, investors are cautious about a rebound this year. Signs of weak gasoline consumption and high crude inventories have dampened enthusiasm.

“When there’s an indicator from the U.S. that suggests the recovery will be slow to emerge, prices get knocked back a bit,” Moore said. “I think oil over the next few months will probably have a downward basis.”

In other Nymex trading, gasoline for August delivery rose 0.89 cent to $2.00 a gallon and heating oil gained 0.79 cent to $1.78. Natural gas for August delivery held at $3.74 per 1,000 cubic feet.

In London, Brent prices rose 57 cents to $70.68 a barrel on the ICE Futures exchange.