SINGAPORE – Oil prices hovered near $77 a barrel Wednesday in Asia as a rally fueled by a stock market surge and a stronger euro pauses.
Benchmark crude for July delivery was up 6 cents to $77.00 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.82 to settle at $76.94 on Tuesday.
Crude has jumped from $64 last month as investor concerns eased that Europe's debt crisis will derail the global economic recovery and improving crude demand.
Oil traders, who often look to equities as a measure of overall investor confidence, were cheered by this week's rally in stocks. All major Asian markets rose Wednesday, led by a 2 percent advance by Japanese stocks. The Dow Jones industrial average soared 2.1 percent Tuesday.
A stronger euro, which makes dollar-based commodities such as oil cheaper to investors with the European currency, also bolstered crude. The euro was steady at $1.2330 on Wednesday.
"Clearly, the price of oil is rallying due to a huge upswing in the Dow Jones and a weakening of the dollar index," said Mike Sander of Sander Capital Advisors. "If that trend continues oil could go back above $80."
In other Nymex trading in July contracts, heating oil was steady at $2.0680 a gallon and gasoline dropped 0.38 cent to $2.1177 a gallon. Natural gas was down 5.2 cents at $5.137 per 1,000 cubic feet.
Brent crude was up 12 cents to $77.22 a barrel on the ICE futures exchange.
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