Crude Oil Trades Near Five Month High as Dollar Drops, U.S. Fuel Supplies Fall

Crude oil rose for a third day in New York as the dollar extended its decline against the yen and the euro, enhancing the investment appeal of commodities, and after a U.S. government report showed a drop in gasoline stockpiles. Futures climbed as the U.S. currency fell to a 15 year low against the yen and an eight month low against the euro amid speculation the U.S. Federal Reserve will expand credit easing to sustain the economic recovery. The U.S. Energy Department said yesterday supplies of motor fuel slipped more than forecast by a Bloomberg News survey.

“We’re seeing tremendous dollar weakening,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. “That’s what we saw throughout 2009, which made oil rise from below $40 to $70. This correlation disappeared all year until now, so all commodities are rising.” Oil for November delivery rose as much as 72 cents, or 0.9 percent, to $83.95 a barrel in electronic trading on the New York Mercantile Exchange. It was at $83.73 at 12:56 p.m. London time. Brent crude for November settlement rose 46 cents, or 0.5 percent, to $85.52 a barrel on the ICE Futures Europe exchange in London.

Futures reached their highest price since May 4 yesterday after the Energy Department reported gasoline supplies fell 2.65 million barrels to 219.9 million. They were forecast to decline 250,000 barrels, according to a Bloomberg News survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, dropped 1.12 million barrels.......Read the entire article.

Check out > Stock Market Leaders Are Now Lagging?

Share