Oil prices bounce after stockpile data; dollar gains

Oil prices jumped Wednesday as government data showed U.S. crude stocks increased slightly less than expected last week, while the U.S. dollar advanced against the euro ahead of Thursday’s European Central Bank meeting.

U.S. stocks climbed following gains in energy shares and some upbeat earnings reports.

Speculation that major oil producers would meet in Russia in May for another attempt at curtailing output also boosted oil prices. Brent crude oil LCOc1 was up $1.55 at $45.58 a barrel, while U.S. crude CLc1 was up $1.42 at $42.50.

Oil prices had been lower earlier after Kuwaiti workers ended a three-day strike.

On Wall Street, investors are focused on the earnings season as they seek catalysts to drive stocks higher. Intuitive Surgical (ISRG.O) rose 3.5 percent after stronger-than-expected profit, though other reports disappointed. Coca-Cola (KO.N) was down 4.1 percent after reporting a drop in sales.

If earnings surprise on the upside, “you could see people … join the rally, and that money from the sidelines will move into the market,” said Nadia Lovell, U.S. Equity Specialist at J.P. Morgan Private Bank.

The Dow Jones industrial average .DJI was up 75.16 points, or 0.42 percent, to 18,128.76, the S&P 500 .SPX had gained 5.16 points, or 0.25 percent, to 2,105.96 and the Nasdaq Composite .IXIC had added 14.23 points, or 0.29 percent, to 4,954.56.

The MSCI All-Country World index .MIWD00000PUS was up 0.1 percent, while the FTSEurofirst 300 index .FTEU3 of top European shares ended up 0.5 percent.

The U.S. dollar rose against the euro on fears that comments from the ECB on Thursday could hurt the euro zone common currency, while some riskier commodity currencies remained near multi-month highs on relief over China’s economy.

The ECB, though, is not expected to make any policy changes at its meeting on Thursday. It is expected to reiterate its plans to support the euro zone economy, according to analysts.

The euro eased from a one-week high against the dollar of $1.1386 touched earlier in the session and was last down 0.4 percent at $1.1313 EUR= ahead of the ECB meeting.

U.S. Treasuries yields held in their recent tight range with no major economic releases due this week and as investors looked ahead to next week’s Federal Reserve meeting.

Benchmark 10-year note yields US10YT=RR were last at 1.81 percent, up from 1.78 percent on Tuesday. Yields have held between 1.81 and 1.69 percent since the beginning of April.

Source: Reuters