Oil Prices Climb Above $64

Crude-oil futures rose Monday, lifted by firmer equities and a weaker dollar, amid fresh hopes about the outlook for the economy.

Light, sweet crude for August delivery traded recently at $64.11 a barrel, up 55 cents, or 0.9% on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 71 cents, or 1.1%, higher at $66.09 a barrel.

Oil prices advanced in tandem with equities, which rose after CIT Group Inc. was expected to announce emergency financing from bondholders, which would help the struggling business lender avert bankruptcy.

The Dow Jones Industrial Average was up 78 points in recent action.

With another major financial sector bankruptcy looking less likely, markets returned focus to strong earnings reported last week by financial giants Goldman Sachs Group Inc. and J.P. Morgan Chase & Co., as well as a bigger-than-expected increase in June housing starts, reported Friday.

A stronger banking sector and improvements in the housing market supported the view of some investors that an economic turnaround will begin before the end of the year. In the oil market, that would mean an increase in demand and potentially tightening supplies over the next few months.

Oil prices had more than doubled between February and late June, reaching an eight-month high above $70 a barrel before a less rosy view of the economy again took hold, briefly forcing prices down below $60 a barrel.

“The economic optimism that drove the rally in the spring seems to have returned,” said Gene McGillian, broker and analyst at Tradition Energy.

The growing optimism about the economy hurt the dollar, where investors often park funds when riskier assets are seen declining. The euro was recently at $1.4248, the weakest the dollar has been since early June.

But oil and fuel supplies are still above average for this time of year, causing some analysts to caution that the latest rally is premature, especially since oil demand has yet to show concrete signs of rebounding.

“People are very eager to draw a straight line between stronger equities, the improving economy and higher energy demand,” said Peter Beutel, president of trading advisory firm Cameron Hanover. “It strikes me as an overly optimistic line to draw, because we don’t see any sign of energy demand turning higher.”

Oil demand in the U.S., the world’s largest oil consumer, was down 6.1% in the four weeks ended July 10 from the previous year, according to the Energy Information Administration.

Front-month August reformulated gasoline blendstock, or RBOB, recently traded up 1.70 cents, or 1%, at $1.7869 a gallon. August heating oil recently traded 2.97 cents, or 1.8%, higher at $1.6707 a gallon.