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Oil climbs to 60 a barrel on the back of a weaker dollar and improved supply signals

Article By: ,  Financial Analyst
February 13, 2015 2:26 PM

US markets opened higher on news of the Ukraine ceasefire, a softening in the rhetoric from Greece and strong growth news out of Germany this morning. As at 12:00 GMT, the S&P 500 was up almost one per cent, the Dow was up 0.62 per cent and the NASDAQ was up 1.18 per cent. Oil rose above US$60 (£38.99) a barrel on Friday for the first time this year, up four per cent this week alone, reported CNBC. This can be attributed to the weaker US dollar and more signs of industry spending cuts that may curb excess supply. Reuters reported that Brent crude for April delivery was up 76 cents at $60.04 by 09:17 GMT, after briefly gaining more than $1, while US crude was up 61 cents at $51.82.

Economic news

US markets are expected to follow Europe's lead and respond favourably to the news that Germany's economy grew by a much stronger than expected 0.7 per cent in the past quarter.

Sentiment was also buoyed by the news that Greek's prime minister confirmed a meeting would go ahead with Greek officials and the ECB, IMF and European Commission on Friday, adding to optimism that a new agreement could be reached.

Currency news

The US dollar fell again overnight as the higher than expected weekly unemployment claims weaker and lower retail sales data impacted sentiment. As at 12:00 GMT, the dollar was trading slightly weaker against sterling at $1.5388.

Company news

Kraft reported a net loss of $398 million for the quarter, compared with a profit of $931 million the year prior, mainly due to a one-off hit of $1.36 billion in post-employment benefit plans. While revenue increased 2.2 per cent to $4.69 billion, Kraft's shares were down two per cent in extended trading. Kraft also announced on Thursday that its chief financial officer, chief marketing officer and executive vice president of research, development, quality and innovation would be leaving the company. This marks the first major changes at Kraft since its chairman took over as chief executive in December. The company said the shake-up was aimed at accelerating the pace of change, reported Reuters.

King Digital, the maker of Candy Crush and other mobile and social media games, reported an eight per cent increase in total gross bookings, an indicator of future revenue, to $586 million in the December quarter. This beat consensus forecasts of $541.4 million, although revenue fell $56.1 million to $545.6 million from the year prior. The company also announced on Thursday that it would buy game developer Z2Live. Investors reacted positively with shares up around 15 per cent at market close.

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