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US oil surges to $50 a barrel as demand improves; Dow at new closing high

US oil surges to $50 a barrel as demand improves; Dow at new closing high

WASHINGTON: Rising demand pushed US crude above $50 a barrel on Thursday, while Sterling jumped after the Bank of England said it was likely to raise interest rates for the first time in a decade in coming months. Energy shares rose on Wall Street and in Europe, but stocks were mixed worldwide. A gauge of global equity indexes fell slightly, as did the S&P 500 in the United States, while major European indexes gained and the Dow set a new closing high. West Texas Intermediate, the U.S. crude benchmark, rose more than 2 percent before paring gains after a forecast by the International Energy Agency on Wednesday and dollar weakness prompted bullish sentiment in the oil market. “Anticipation is growing that this could quicken the pace of oil market rebalancing,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.

US crude rose 9 cents to settle at $49.89 a barrel and Brent settled up 31 cents at $55.47. Brent has climbed more than $10 a barrel over the past three months and is close to where it was at the beginning of the year, roughly trading between $55 and $57 a barrel. BP Chief Executive Bob Dudley told Reuters in an interview that oil prices were likely to stay between $50 and $60 a barrel as major producers kept output restricted. Meanwhile, the new guidance from the Bank of England pushed sterling to a one-year high against the U.S. dollar as investors priced in a more than 50 percent chance of a rate hike before the year’s end. The central bank said its tolerance for above-target inflation has declined even if Britain’s departure from the European Union remained a risk. Data this week showed British prices rising faster and unemployment falling to a four-decade low. Sterling was last trading at $1.3402, up 1.45 per cent on the day. Earlier it rose to a 12-month high of $1.3404. Britain’s blue-chip FTSE 100 share index  fell sharply after the BoE warning, which followed a monetary policy meeting, and closed down 1.14 percent to lows last seen in May. In other currency trading, the dollar index  fell 0.41 per cent, while the euro was up 0.17 per cent to $1.1905. The Japanese yen strengthened 0.01 percent versus the greenback at 110.47 per dollar.