Oil advanced for a second day as U.S. stocks gained amid better-than-forecast earnings and as Germany backed the European Central Bank’s bond-buying plan, easing concern that the region’s debt crisis is worsening.
Prices erased losses after the Standard & Poor’s 500 Index rose to a three-month high. The euro strengthened as German Chancellor Angela Merkel’s government supported the plan. Oil fell earlier as Tropical Storm Ernesto moved away from producing regions in the Gulf of Mexico.
“The stock market is edging higher and we are seeing some buyers coming in,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The euro is rising against the dollar. It does look like the market has higher levels in front of it.”
Oil for September delivery added 44 cents, or 0.5 percent, to $91.84 a barrel at 12:19 a.m. on the New York Mercantile Exchange. It rallied 4.9 percent on Aug. 3, the biggest gain since June 29, sending prices to the highest settlement since July 20. Prices are 7.1 percent lower this year.
Brent crude for September settlement increased 10 cents to $109.04 a barrel on the London-based ICE Futures Europe exchange.
The S&P index rose as much as 0.6 percent to 1,399.54, the highest intraday level since May 3. The S&P GSCI Index of 24 commodities advanced 0.2 percent.
The euro climbed 0.2 percent to $1.2417, erasing an earlier decline, after Merkel’s deputy spokesman, Georg Streiter, said the government backed the ECB’s bond-buying plan announced last week. A stronger euro and weaker dollar increase oil’s appeal as an investment alternative.
Oil declined earlier on projections that Ernesto will cross the Yucatan Peninsula, according to the U.S. National Hurricane Center, lessening the threat to oil platforms in the Gulf, home to 29 percent of U.S. production.