New home sales in USA rise by 27% in March, oil prices continue to rise

26-Apr-10

June Brent crude stood at US$83.59 while US light, sweet crude settled at US$82.43. Crude posted its biggest gains on Friday after it was reported that US new home sales unexpectedly jumped 27% in March. The week has seen a rise in oil prices as jet fuel demand revived on withdrawal of the week long flight ban that was imposed over most of Europe’s airspace along with a decline in the US dollar vs the Euro on Greece’s decision to ask the European Union and the International Monetary Fund (IMF) for financial aid as its debt crisis worsened. Oil prices were additionally pressurised by a decision by US Securities and Exchange Commission to file fraud charges against investment bank Goldman Sachs. As per the SEC, information about an investment product disclosed by Goldman Sachs was not correct and misled investors, resulting in losses of US$1 bln. It is alleged that Goldman intentionally set up a sub-prime mortgage investment product that would decline in value, allowing associate hedge fund Paulson & Co to make money by shorting it. Data released by the Energy Information Administration (EIA) showed a 1.9 mln barrel increase in US stockpiles, mostly due to a jump of 1.8 mln barrels at Cushing Oklahoma, the delivery point of NYMEX crude contract. Rise in gasoline stocks and distillates was greater than expected. High levels of supply imply low demand. On Saturday, June Brent Crude rallied to US$87.21, while US light, sweet crude returned to US$85.