Growing optimism in the talks between European leaders has given a boost to oil futures, as worries about the region's economic future subside, according to Bloomberg.
Lawmakers in Europe, particularly from the region's two largest economies of Germany and France, have been engaged for weeks in negotiations to expand the European Financial Stability Facility.
Established as part of an earlier round of bailouts, European leaders now hope to use it to protect financial systems from the ongoing instability in Greece and elsewhere in the euro zone. With the recent release of a draft that would expand the fund as much as 10 percent oil futures saw an increase of as much as 1.2 percent.
"If the EU manages to draw up the lines of a support package large enough to rebuild the trust of the market we expect oil prices to move up," Thina Saltvedt, an analyst at Nordea Bank AB in Oslo, told Bloomberg.
Though the recent news has proven positive for the global economy and the outlook for oil, The Wall Street Journal reports that prospects for the US economy remain unclear. As the world's largest economy, this uncertainty limits any gains made by oil.
At 10:11 a.m. on Thursday, brent crude oil futures increased 1.35 percent, a $1.46 increase to $109.85 per barrel.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.