Thursday, October 7, 2010

Crude Oil Slip From a 5 Month High as Stocks Take a Breather

Crude oil tumbled from a five month high after the dollar rebounded versus the euro and U.S. equities declined, wiping out an early advance. Oil headed for the biggest drop in three weeks as the greenback climbed against the common currency for the first time in three days, reducing the appeal of commodities as an alternative investment. The Standard & Poor’s 500 Index decreased for a second day as raw-material prices fell, sending producer shares lower.

“The dollar and equities are the main drivers,” said Kyle Cooper, director of research for IAF Advisors in Houston. “What happens with inventories and demand isn’t that important.” Crude oil for November delivery fell $1.56, or 1.9 percent, to $81.67 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Oil dipped as much as $2.23 to $81, and reached $84.43 earlier today, the highest level since May 4.

Brent crude oil for November settlement declined $1.68, or 2 percent, to $83.38 a barrel on the ICE Futures Europe exchange in London. It reached $86.02, the highest level since May 4. The U.S. currency rose after applications for U.S. unemployment benefits unexpectedly fell. Jobless claims dropped by 11,000 to 445,000 in the week ended Oct. 2, the fewest since July 10, Labor Department figures showed today in Washington. The dollar climbed 0.1 percent against the euro to $1.391 after reaching an eight month low of $1.4029 in New York.....Read the entire article.

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