Monday, December 14, 2009

Oil Is Little Changed Amid Speculation of Weak Demand Recovery

Crude oil was little changed near a two month low amid speculation that demand will be slow to recover. Oil fell as much as 1.8 percent after reports showed declining industrial output in Europe and the smallest improvement this year in consumer confidence in Japan, the world’s third largest oil consumer. Equities rallied and the dollar weakened from a two month high, supporting prices. “You won’t have a truly healthy crude market and be able to argue for crude going above $80 until you see the developed market, North America, Europe and Asia, turn around,” said Roger Read, an analyst with Natixis Bleichroeder in Houston. He forecast oil would trade in a $60 to $80 range for the next few months.

Crude oil for January delivery rose 5 cents to $69.92 a barrel at 10:36 a.m. on the New York Mercantile Exchange. Oil has risen 57 percent this year. Earlier, futures touched $68.59, the lowest since Oct. 5. European industrial output fell for the first time in six months in October, led by a slump in consumer goods. Employment declined in the third quarter. The Tankan business confidence index in Japan showed large companies planned deeper spending cuts to protect earnings under threat from the yen, which climbed to a 14 month high against the dollar in November.....Read the entire article.

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