Oil Rises as Dollar Declines, Crude Supplies Fall Unexpectedly

Oil rose in New York as the dollar weakened against the euro and a government report showed an unexpected drop in U.S. crude supplies, boosting optimism about a demand recovery in the biggest energy consuming nation. Oil pared yesterday’s 1.9 percent fall as the dollar declined toward a two-week low, increasing the appeal of commodities as an alternative investment. Prices were also supported by an Energy Department report that showed U.S. crude stockpiles fell 978,000 barrels last week amid a drop in imports. A 2 million barrel gain was forecast in a Bloomberg survey.

“The imports were down and that was a big surprise,” said Jonathan Koranfel, a director for Asia at options traders Hudson Capital Energy in Singapore. “Any more weakness in the dollar is limiting oil’s gains to a cap of about $72. The trading range in crude has gone from $65 to $75 to about $68 to $72. It’s just getting tighter and tighter.” Crude oil for November delivery gained as much as 83 cents, or 1.2 percent, to $70.40 a barrel in electronic trading on the New York Mercantile Exchange. It was at $70.18 at 12:55 p.m. Singapore time. Yesterday, the contract dropped $1.31 to settle at $69.57. Prices have gained 57 percent since the start of the year.....Read the entire article