Oil stayed near an eight-day high above $75 today as sustained momentum from Federal Reserve chairman Ben Bernanke's speech last week boosted Asian stock markets.
Japanese shares jumped more than 3 per cent while the yen fell as the Bank of Japan held an emergency meeting to curb a rise in the Japanese currency that threatens a fragile economic recovery.
Oil prices also received support from increased hurricane activity in the Atlantic Ocean, with storms expected to follow paths closer to the United States.
US. crude for October rose 3 cents to $75.20 a barrel, having earlier approached Friday's peak at $75.59, the highest intraday price since August 19th. ICE Brent for October rose 2 cents to $76.67.
Oil gained 2.5 percent on Friday following a speech by Mr Bernanke that calmed fears of a double-dip recession. Prices earlier in the week had dropped to an 11-week intra-day low of $70.76.
Other commodities also extended sharp gains on Friday, lifted by a downward revision to US growth that was not as severe as anticipated.
US gross domestic product growth for the second quarter was revised down to only 1.6 per cent, from 2.4 per cent, the Commerce Department said on Friday.
Many economists had forecast an even bigger downward revision to 1.4 per cent growth, compared with 3.7 per cent in the first quarter. But most still do not believe the economy will slide back into recession and say the most likely prospect is for continued slow expansion.
Hurricane Earl was expected to sweep past the Virgin Islands and Puerto Rico as a major hurricane on Monday, before turning towards the northwest to weaken and approach the mid-Atlantic US coast, the National Hurricane Centre (NHC) said in its latest advisory.
On the heels of Earl, an area of low pressure in the central Atlantic Ocean had an 80 per cent chance of becoming a tropical cyclone in the next 48 hours, according to the NHC. It was still too early to determine whether this system would take a similar track to hurricanes Danielle and Earl, forecast to stay well away from the oil-rich Gulf of Mexico.
Money managers cut net long crude oil positions on the New York Mercantile Exchange to 73,475 in the week through August 24th, the Commodity Futures Trading Commission said on Friday, from 108,874 in the week to August 17th.
Reuters