* Euro gains, dollar dips on enhanced risk appetite
* Wall Street rallies on upbeat Fed economic view
* Coming up: U.S. real GDP Q1 data due Friday morning
(Releads, updates market activity, closing prices)
By Gene Ramos
NEW YORK, April 29 (Reuters) - Oil rallied on Thursday to
end at its highest level in two weeks on upbeat U.S. economic
data and greater risk appetite as Greece neared a bailout
deal.
Crude rose for a second straight day and breached $85 a
barrel, part of a broad advance across commodities markets, as
risk appetite was whetted up by the euro's jump against the
greenback.
Energy markets were also aided by the Federal Reserve on
Wednesday pledging to hold key interest rates at low levels for
a longer period. []
The Fed's statement lifted Wall Street higher as Greece
neared a bailout deal, while fewer jobless benefit claims and
rosier earnings supported expectations of a sustainable
economic recovery. [] []
"The energy market again hitched a ride on the coattails of
a strong up-move in equities as economic optimism returned as
primary mover of oil prices," said Jim Ritterbusch, president
of Ritterbusch & Associates, trading consultants in Galena,
Illinois.
In the United States, crude for June delivery <CLMO>
settled up $1.95, or 2.3 percent, at $85.17 a barrel.
In London, the ICE Brent June crude <LCOc1> ended 74 cents
higher, or 0.86 percent, at $86.90.
The euro gained for a second straight day, rebounding from
a one-year low against the dollar in the prior session on the
Greek bailout plan, making dollar-denominated oil cheaper for
buyers of other currencies. []
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For a graphic showing the oil/dollar correlation, see:
http://link.reuters.com/rap99j
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Brent's premium to U.S. benchmark West Texas Intermediate
<CL-LCO1=R> narrowed to $1.73 at the close, after ending at
$2.94, on Wednesday, during which it went as high as $3.65, the
widest since Aug. 14, 2009.
Crude prices have risen even though total U.S. crude
stockpiles rose by 1.9 million barrels in the week to April 23,
the Energy Information Administration said on Wednesday, nearly
double what analysts had expected. []
The supply glut, particularly at the Cushing, Oklahoma
delivery hub for oil traded on the New York Mercantile
Exchange, has depressed the front-month oil contract against
more distant futures contracts, resulting in a wider contango.
Oil stored the hub rose by 1.2 million barrels to 36.8
million barrels in the week to April 27, according to a report
Thursday from energy industry data provider Genscape.
That was the highest level since the company began to
report them in May, 2009, said Genscape. []
EIA data on Wednesday showed Cushing storage rose in the
week to April 23 by 500,000 barrels to 34.6 million barrels.
Gasoline futures in New York rose more than 1 percent.
U.S. gasoline demand jumped 3.1 percent in the past four
weeks from a year ago, causing an unexpected 1.2 million-barrel
drop in gasoline inventories last week, EIA data showed.
The news raised expectations for a healthy demand growth
during the summer driving season, which starts in May.
"There's still a feeling that demand is robust and that the
broad outlook is good," said oil broker Christopher Bellew at
Bache Commodities, who also highlighted strong growth in Asian
countries such as China.
The euro zone sovereign debt turmoil deepened on Wednesday
after rating agency Standard & Poor's cut Spain's credit status
a notch, a day after lowering Greece debt to junk status and
downgrading Portugal. []
But the market is now hopeful that help for Greece can be
swiftly carried out to prevent contagion, after German
Chancellor Angela Merkel threw her weight behind a deal.
(Additional reporting by Emma Farge in London; Janet McGurty
and Joshua Schneyer in New York; and Alejandro Barbajosa in
Singapore; Editing by Lisa Shumaker)
