Bloomberg: Crude Oil Drops a Second Day as Fed Sees Economic Risk

Crude oil fell for a second day in New York as investors speculated that fuel demand will falter after the U.S. Federal Reserve said there are “significant downside risks” to the economic outlook of the world’s biggest crude consuming nation.

Futures slipped as much as 2.1 percent after dropping 1.2 percent yesterday. The Fed said it will buy $400 billion of long term debt in an attempt to keep the economy from relapsing into a recession. U.S. gasoline stockpiles climbed more than forecast last week and the nation’s oil production rose to the highest in eight years, Energy Department reports showed.

“It’s quite clear at the moment there is a lot of bearishness,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney. “The global growth scenario continues to be clouded, all the commodities were hit and oil clearly didn’t escape.”

Crude for November delivery dropped as much as $1.77 to $84.15 a barrel in electronic trading on the New York Mercantile Exchange and was at $84.51 at 12:29 p.m. Sydney time. The contract yesterday fell $1 to $85.92. Prices are 13 percent higher the past year......Read the entire article.

Bloomberg: Crude Oil Gains for First Time in Three Days

Crude oil rose for the first time in three days as advancing European equity markets eased concern that the region’s debt crisis is damping demand for fuel, while investors bet that some supplies may be at risk.

Futures in New York gained as much as 1.4 percent, halting a slide of more than 4 percent in the previous two trading days, as the Stoxx Europe 600 index advanced 1.6 percent. Opposition fighters in Libya continued to battle loyalists at the town of Bani Walid and the city of Sirte, while anti government protests in Yemen left 50 people dead this week.

“Given the scale of the price fall, we are seeing some buying interest out there,” said Amrita Sen, a London based analyst at Barclays Plc. “The fundamentals still look robust with demand, even after slowing down, outpacing supply growth.”

Oil for October delivery on the New York Mercantile Exchange gained as much as $1.21 to $86.91 a barrel and was at $86.75 a barrel at 12:48 p.m. London time. The contract fell 2.6 percent yesterday and will expire today. The more actively traded November future was up $1.02 at $86.83 a barrel.

Brent crude for November settlement was up $1.40 at $110.54 a barrel on the ICE Futures Europe exchange in London. The contract yesterday fell 2.7 percent to $109.14 a barrel. The European benchmark future was at a premium of $23.67 to the November price of West Texas Intermediate, compared with a record settlement of $26.87 on Sept. 6......Read the entire Bloomberg article.


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OPEC Expected to Keep Oil Production Quota Unchanged

OPEC will probably keep its production quota unchanged when it meets on Dec. 11 in Ecuador, ministers from Angola, Venezuela and Libya said. The Organization of Petroleum Exporting Countries considers oil at $80 to $85 a barrel a “comfortable price,” Angola’s Minister of Petroleum Jose Maria Botelho de Vasconcelos said yesterday. Crude traded around $86 a barrel in New York today. Venezuela’s energy minister Rafael Ramirez, who said he prefers a price level of $100 a barrel, told reporters in Doha today that the group will likely maintain its existing output target.

“The current environment is of some stability,” Angola’s Vasconcelos said in an interview. “The sentiment among members is for maintaining the production level.” Libya’s top oil official, Shokri Ghanem, said yesterday in Doha that the organization will seek stricter compliance with the current production target. OPEC, which produces about 40 percent of the world’s oil, hasn’t changed its formal limit since December 2008, when it announced record supply cuts and a quota of 24.845 million barrels a day.

The group’s adherence to that level has faltered as recovering demand and rising prices encourage members to exceed their individual allocations. Compliance among the 11 nations bound by quotas slipped to 51 percent in October, according to data from the group published on Nov. 11. Qatari Energy Minister Abdullah bin Hamad al-Attiyah said today he won’t attend the Dec. 11 gathering in Quito, Ecuador.

Angola’s Vasconcelos said he expects the country’s oil production to increase to 1.9 million barrels a day next year, close to its maximum capacity. Angola pumped an average of 1.73 million barrels a day in November, according to a Bloomberg survey of producers and analysts on Nov. 30. OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from the quota system.

Posted courtesy of Bloomberg News

Bloomberg reporter Grant Smith can be reached at gsmith52@bloomberg.net

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Bloomberg: Crude Oil Rises on Gain in Chinese Output, Reduced European Debt Concern

Crude oil climbed on greater than forecast growth in U.S. private employment and Chinese manufacturing and on signals the European Central Bank will act to prevent the spread of the region’s debt crisis. Prices surged as much as 2.8 percent as companies in the U.S. boosted payrolls the most since November 2007, according to figures from ADP Employer Services. Chinese manufacturing grew at the fastest rate in seven months. Futures reached the day’s high after Goldman Sachs & Co. said oil will average $110 a barrel in 2012, up from a forecast $100 of a barrel next year.

“As the global economy goes, so goes oil,” said Andre Julian, chief financial officer and senior market strategist at OpVest Wealth Management in Irvine, California. “The economic numbers in China and elsewhere today have been very strong and point to accelerating growth.” Crude oil for January delivery increased $2.16, or 2.6 percent, to $86.27 a barrel at 12:30 p.m. on the New York Mercantile Exchange. Prices climbed to $86.47, the highest level since Nov. 12.

Brent crude oil for January settlement rose $2.32, or 2.7 percent, to $88.24 a barrel on the London based ICE Futures Europe exchange. Goldman increased its forecast for U.S. gross domestic product growth next year to 2.7 percent from 2 percent. The U.S. economy will expand 3.6 percent in 2012, according to a report sent to Goldman Sachs clients today. The global economy will expand 4.6 percent next year and 4.8 percent in 2012, the bank said.

“Goldman has been banging the bull drum all year,” said Phil Flynn, a Chicago-based analyst and trader with investment adviser PFGBest.......Read the entire article.


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Crude Oil Prices Rise to Two Week High on U.S. Retail Sales, Irish Bailout

Crude oil rose to a two week high as U.S. consumers spent more over the Thanksgiving weekend than last year, a sign confidence in the economy is strengthening. Oil climbed above $85 a barrel as the average U.S. shopper increased purchases by 6.4 percent from the 2009 period, a report from the National Retail Federation showed. Crude also advanced amid speculation that colder than normal weather may boost demand for heating fuel in the eastern U.S. and Europe.

“People are looking at a pretty decent retail environment, and that’s giving oil a boost,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “Cold weather is more bullish earlier in the season than later. If people turn on their heaters early and they stay on, that’s good for the season.” Oil for January delivery climbed $1.97, or 2.4 percent, to $85.73 a barrel on the New York Mercantile Exchange, the highest settlement since Nov. 11. Futures have gained 13 percent in the past year.

Brent crude for January settlement rose $1.76, or 2.1 percent, to $87.34 a barrel on the ICE Futures Europe exchange in London. About 212 million shoppers went to stores and websites over the holiday weekend in the U.S., on average spending $365.34, the Washington based National Retail Federation reported. Temperatures in the eastern half of the U.S. will be below normal from Dec. 7 to Dec. 13, according to a forecast issued today by the U.S. Climate Prediction Center in Camp Springs, Maryland......Read the entire article.


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Bloomberg: Talk of $100 Oil Returns as Options Jump Most in 3 Months

Oil’s return to $100 has become the biggest bet in the crude options market.

The price of options to buy December 2011 futures at $100 a barrel jumped 14 percent on Nov. 24, the largest one day gain in three months, according to data compiled by Bloomberg. So called open interest for the contract has risen 51 percent this year to 45,424 lots, the highest for any crude option on the New York Mercantile Exchange.

The increase in trading of $100 options shows some investors anticipate oil will rise at least 19 percent to levels last reached in 2008. While crude is up 5.5 percent this year as the economy recovers, Morgan Stanley said Nov. 1 that prices will reach $100 next year as spare production capacity shrinks. At the same time, BNP Paribas SA said Nov. 18 further price gains “will be difficult” as the Federal Reserve seeks to revive the U.S. economy through an extended stimulus program and Europe struggles to contain its sovereign debt crisis.

“The tug of war in oil prices continues as the short term debt market concerns obscure improving oil market fundamentals,” Lawrence Eagles, global head of commodities research at JPMorgan Chase & Co. in New York, said in a Nov. 26 report.

Futures for January delivery on the Nymex snapped two weeks of declines last week, rising 2.8 percent to $83.76 a barrel as of Nov. 26. Options contracts that give investors the right to buy December 2011 futures at $100 a barrel rose to $5.55 on Nov. 24, from $4.87 the day before, the largest increase since Aug. 27, Bloomberg data show. They have averaged $6.40 this year and ended last week at $5.46.......Read the entire article.


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Bloomberg: Crude Oil Declines Because of Concern Ireland Debt Crisis May Spread to Spain

Crude oil declined in New York amid concern Ireland’s debt crisis will spread to Portugal and Spain, diminishing the appeal of the region’s assets. Futures slipped as the euro dropped against the dollar, curbing investor demand for raw materials. Floor trading was closed yesterday for Thanksgiving in the U.S. and electronic trades will be booked with today’s for settlement purposes.

With the U.S. markets closed “attention was instead focused on Europe and Ireland bailout talks, with sovereign debt concerns weighing on oil prices,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note today. The January contract fell 32 cents, or 0.4 percent, to $83.86 a barrel, in electronic trading on the New York Mercantile Exchange at 11:58 a.m. Sydney time. Futures are 2.9 percent higher this week, heading for the first weekly gain in three weeks. Prices are up 5.6 percent this year.

Oil rose the most in four months on Nov. 24 after U.S. jobless claims fell to the lowest level since 2008, bolstering optimism economic growth will accelerate in the biggest crude consuming nation. The Labor Department said applications for unemployment benefits declined by 34,000 to 407,000. Brent crude for January settlement gained 26 cents, or 0.3 percent, to settle at $86.10 a barrel on the London based ICE Futures Europe exchange yesterday.

Posted courtesy of Bloomberg News

Bloomberg reporter Ben Sharples can be contacted at bsharples@bloomberg.net


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Venezuelan Black Sea Oil Route Threatens European Supplies

Deliveries of Venezuelan crude to Belarus from the Black Sea may pose a threat to Russian oil supplies bound for central Europe, Russia’s pipeline operator OAO Transneft said. Transneft is preparing a letter to the European Union explaining the situation, Igor Dyomin, a Transneft spokesman, said by telephone in Moscow. “The decision has increased risks to Russian oil deliveries to Europe,” he said.

Belarus reversed the direction of one line in the Druzhba link’s southern branch on Nov. 21 to carry crude east to the Mozyr refinery, Dyomin said. The branch’s parallel line continues to carry Russian oil west to the Czech Republic, Croatia, Slovakia, Hungary and Germany, he said.
Russia and Belarus, which are developing a customs union with Kazakhstan, have clashed over oil export taxes as Russia moved to roll back a discount that allowed Belarus to benefit from cheap oil supplies. Russian Prime Minister Vladimir Putin said the duty may be canceled once a free-trade area is created.

Belarus plans to take delivery of as much as 9 million metric tons of crude from Venezuela next year, a Belarusian presidential administration official said in September. Belarus’s use of the line means Transneft won’t be able to increase deliveries via Druzhba’s southern branch to meet additional winter demand and won’t have an alternative route in case of an accident, Dyomin said.

Transneft supplies to Europe have continued uninterrupted through the second line of Druzhba, which is operating at slightly more than its capacity of 17.5 million tons a year, Dyomin said. The crude Belarus received was Russian oil that Venezuela obtained via a swap at the Black Sea port of Novorossiysk, Dyomin said. The 80,000 ton cargo was carried from the Black Sea to Belarus via Ukraine’s Odessa-Brody pipeline, Dyomin said. The next delivery, of 78,200 tons of oil, is scheduled to arrive at the Odessa port on Nov. 25, Kommersant-Ukraine said yesterday.

“Why Belarus can’t take that same oil via Druzhba is beyond my understanding,” Dyomin said.


Posted courtesy of Bloomberg News. Reporter Stephen Bierman can be contacted in Moscow at sbierman1@bloomberg.net.



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Bloomberg: Hedge Funds Cut Oil Bets as Ireland, China Sap QE2 Gains

Hedge funds cut bullish bets on oil by the most in almost three months amid speculation fallout from the Irish debt crisis and China’s efforts to curb inflation will slow economic growth, sapping demand for fuel. The funds and other large speculators reduced so called long positions, or wagers on rising prices, by 15 percent in the seven days ended Nov. 16, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report, released Nov. 19. It was the first drop in four weeks and the largest decline since the seven days ended Aug. 24.

Bets on gains in oil prices climbed to the highest level in at least four years in the week before the Federal Reserve announced it would spend $600 billion buying Treasuries through the second round of so called quantitative easing, or QE2, to keep the economic recovery on track.
Crude rose to a two year high of $87.81 a barrel on Nov. 11 in New York. It has since lost 7.8 percent as Ireland moved closer to a European Union bailout and China, the world’s biggest energy consumer, took steps to curb bank lending.

“The drop from extremely high levels makes perfectly valid sense, given the uncertainty now of QE2 and renewed concern regarding a European banking situation, namely Ireland,” said Kyle Cooper, director of research at IAF Advisors in Houston. “This has led to uneasiness regarding oil demand, and the liquidation occurred in that very large speculative position.” Net long positions dropped by 30,518 futures and options combined to 178,397 the week ended Nov. 16, according to the commission report. These are held by what the CFTC categorizes as managed money, including hedge funds, commodity pools and commodity trading advisers......Read the entire article.



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Bloomberg: Crude Oil Rebounds From Four Week Low After Surprise Drop in U.S. Crude Supplies

Crude oil rebounded from a four week low as the growing prospect that Ireland will get a rescue bailout from the European Union stoked gains for stocks and commodities around the world. Crude rose as much as 2.1 percent, snapping four days of declines, after Ireland’s central bank governor said he expects the country to seek a bailout from the European Union and the International Monetary Fund. Yesterday’s Energy Department report showed crude inventories unexpectedly dropped the most since August 2009.

“The situation in Europe looks like it’s going towards a solution,” said Sintje Diek, an analyst with HSH Nordbank in Hamburg. “There will be a rescue for Ireland, and that’s good news for the euro. Fundamentals are on the side of investors; inventories are going down.” Crude for December delivery advanced as much as $1.70 to $82.14 a barrel on the New York Mercantile Exchange. It was at $81.72 at 11:37 a.m. London time. Brent crude for January settlement rose as much as $1.72, or 2.1 percent, to $85 a barrel on the London based ICE Futures Europe exchange.

The New York contract, which expires tomorrow, fell yesterday to $80.44, the lowest settlement since Oct. 19. The more actively traded January future was up $1.31 at $82.35. Crude slumped yesterday amid speculation that China, the world’s biggest energy consuming country, will raise interest rates to cool economic growth. Prices also dropped on concern Europe’s debt crisis is worsening. Oil has fallen 4 percent since last week and is up 2.7 percent this year......Read the entire article.



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Bloomberg Analysis: Crude Oil May Plunge as Prices Diverge From Strength Index

Crude oil may plunge below $80 a barrel in New York as the failure of its relative strength index to keep pace with price gains signals that this month’s rally is over, according to technical analysis by Commerzbank AG. Futures surged to a two-year high of $88.63 a barrel on the New York Mercantile Exchange on Nov. 11. On that day, oil’s 14 day RSI, a measure of how rapidly prices rise or fall in that period, failed to surpass a nine month peak reached in October. That indicates the gains have run their course and a downward correction may be imminent, Commerzbank said.

“This suggests a loss of upside momentum,” London based analyst Karen Anne Jones said in an interview. Oil, which traded for $83.47 at 14:19 p.m. London time, earlier today broke a trend line that has supported prices since September at $83.88, and is set to plummet, Jones said. The 14 day RSI was at 50.8.

“The market is sitting today on the two month uptrend, and this is now exposed,” she said. “Failure looks likely and will spell a deeper retracement.” Once crude drops below $83.88 it will be drawn toward a range of $78.50 to $79.31 within three weeks, according to Commerzbank. This price band combines a threshold from the Fibonacci sequence of numbers, with the convergence point of two moving averages.

A move to the $78.50-$79.31 area would complete a 38.2 percent reversal of oil’s advance since May, Jones said. The significance of a 38.2 percent movement derives from the Fibonacci sequence, used by traders to predict points of resistance and support as markets repeat earlier moves. This region is also where crude’s 100 day and 200 day averages cross. The 100 day and 200 day rolling mean are both at $78.57 a barrel.

Bloomberg reporter Grant Smith can be contacted at gsmith52@bloomberg.net

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Crude Oil Increases as Improving Economic Indicators Point to Higher Fuel Demand

Crude oil climbed on speculation improving economic indicators in the U.S. and Japan, the world’s first and third biggest crude oil consuming counties, may be a sign of  increased fuel demand. Oil rose as much as 1.1 percent after a report showed gross domestic product in Japan grew more than forecast in the third quarter as consumer spending increased. U.S. retail sales last month increased the most since March, a sign consumers may play a bigger role in the economic recovery.

“Some good economic numbers came out today, which gave us a boost,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “The market is moving on sentiment and perception. The headlines of any given day will decide the market’s move.” Crude oil for December delivery advanced 54 cents, or 0.6 percent, to $85.42 a barrel at 9:01 a.m. on the New York Mercantile Exchange. Futures rose as much as 89 cents to $85.77.

Brent crude oil for December settlement increased 67 cents, or 0.8 percent, to $87.01 on the ICE Futures Europe exchange in London. The December Brent contract expires today. More actively traded January oil rose 63 cents, or 0.7 percent, to $87.16. Japan’s economy increased an annualized 3.9 percent in the three months ended Sept. 30, the Cabinet Office said in Tokyo today. The median forecast of 21 economists surveyed by Bloomberg News was for a 2.5 percent gain.......Read the entire article.


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Crude Oil Rises for First Time in Three Days on Optimism U.S. Demand May Gain

Crude oil climbed for the first time in three days after the Japanese economy grew faster than expected, stoking speculation Asia’s fuel demand will increase. Futures retraced some of last week’s 2.3 percent decline after Japan’s gross domestic product rose an annualized 3.9 percent in the third quarter, the Cabinet Office said in Tokyo today. The median forecast of 21 economists surveyed by Bloomberg News was for a 2.5 percent increase.

“It gives further evidence of that Asian recovery,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “You’ve seen the recovery in China and the positive spill over affects for those economies in the Asian region. Up until now, you haven’t really seen it as much in Japan.”

December crude futures added as much as 50 cents, or 0.6 percent, to $85.38 in electronic trading on the New York Mercantile Exchange, and was at $85.33 at 11:53 a.m. Sydney time. Crude fell $2.93 to $84.88 on Nov. 12, the lowest since Nov. 3. Prices are up 7.6 percent this year.
Chinese oil processing rose to a record last month after refiners increased production to ease a domestic fuel shortage. Plants refined 37 million metric tons, or about 8.8 million barrels a day, in October, up 12 percent from a year earlier, China Mainland Marketing Research Co. said Nov. 11......Read the entire article.


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Goldman Sachs: Oil Will Be "Substantially Higher" by 2012

Crude oil prices will be “substantially higher” by 2012 as the global stockpile surplus shrinks and excess production capacity drops, according to Goldman Sachs Group Inc., the most profitable bank in Wall Street history. Global economic growth will drive oil demand and reduce inventories, which are still “exceptionally high” in developed countries including the U.S., the world’s biggest user of crude, Goldman said in a report dated yesterday. Spare capacity held by the Organization of Petroleum Exporting Countries will decline as the 12-member group, which pumps 40 percent of the world’s oil, boosts supply to meet demand, the bank said.

“Despite the recent rally, we believe that forward price levels offer good hedging opportunities,” Goldman analysts, led by Allison Nathan in New York, said in the report. “We continue to expect improving fundamentals will provide additional support to prices.” Oil climbed to the highest in two years yesterday, and is up 7 percent this month, on speculation the Federal Reserve’s stimulus program will weaken the dollar, bolstering the investment appeal of commodities. U.S. crude inventories plunged 7.4 million barrels last week, the biggest drop since September 2008, according to an American Petroleum Institute report yesterday.

The Fed said Nov. 3 it will buy an additional $600 billion of Treasuries through June to spur the economy. Investors should have an “overweight allocation” on commodities because this policy, along with the global recovery, is positive for prices, according to Goldman.......Read the entire article.


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Crude Oil Trades Near a Two Year High as U.S. Employment Figures Beat Forecasts

Crude oil traded near a two year high in New York after employment in the U.S. increased more than forecast, signaling a recovery in fuel demand from the world’s biggest crude consuming nation. Futures pared earlier gains above $87 a barrel as the dollar strengthened against the euro, curbing investor demand for commodities. Payrolls climbed by 151,000 workers in October following a revised 41,000 drop the prior month, the Labor Department said Nov. 5. Prices jumped 6.7 percent last week, the most since February.

“Oil is quite positive, the market has taken heart in the unemployment rate,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. “Crude has broken through the topside of the range, so you’ve got to look for higher prices.” Crude for December delivery was at $86.90 a barrel, up 5 cents, in electronic trading on the New York Mercantile Exchange at 12:27 p.m. Singapore time. The contract earlier rose as much as 64 cents, or 0.7 percent, to $87.49, the highest since Oct. 9, 2008. Futures are up 10 percent in 2010.

The increase in U.S. payrolls was the first since May and exceeded all estimates from economists surveyed by Bloomberg News. The U.S. jobless rate held at 9.6 percent, where it’s been since August, according to the Labor Department......Read the entire article.


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Bloomberg:Crude Oil Trades Near Two Year High, RSI Signals Reversal

Crude oil traded near its highest level in two years in New York as the dollar headed for a weekly decline against most major counterparts after the Federal Reserve’s decision to purchase more debt to boost the U.S. economy.

Crude’s 6.6 percent rally this week, driven by the dollar’s decline, may be about to end, according to a technical indicator used by traders. The U.S. currency has fallen versus all but one of its 16 most traded peers since the Fed said Nov. 3 it will buy about $75 billion of Treasuries every month through June.

“Underlying demand in the industrialized world is still not enough to justify these price levels,” said Eugen Weinberg, head of commodity research at Commerzbank AG. “But market sentiment is so strong that if the weakness of the dollar persists I couldn’t rule out higher prices.”

Oil for December delivery traded at $86.83 a barrel, up 34 cents, in electronic trading on the New York Mercantile Exchange at 12:51 p.m. London time. The contract earlier rose to $87.22, the highest price since Oct. 9, 2008. Brent crude for December settlement rose 16 cents to $88.16 after advancing to $88.80 a barrel on the ICE Futures Europe exchange in London.

Futures advanced after a U.S. government report showed payrolls rose more than forecast in October. Payrolls climbed 151,000, exceeding the median estimate of economists surveyed by Bloomberg News and following a revised 41,000 drop the prior month that was smaller than initially estimated, Labor Department figures showed today in Washington. The jobless rate held at 9.6 percent, in line with forecasts. Crude oil's relative strength index......Read the entire article.


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Crude Oil Rises a Fourth Day After Fed Move Weakens Dollar

Crude oil climbed for a fourth day in New York, the longest rising streak since September, as the dollar traded near a nine month low against the euro after the Federal Reserve said it will expand stimulus to spur the economy. Crude rose above $85 a barrel to trade near the highest in six months amid speculation of a recovery in the U.S., the world’s largest oil consuming nation. The Fed yesterday said it will buy an additional $600 billion of Treasuries through June. U.S. gasoline stockpiles fell last week to the lowest in almost a year, according to an Energy Department report.

“The Fed is pumping money into the economy and the money doesn’t have that many places to go, interest rates are almost zero,” said John Vautrain, senior vice president at U.S. energy consultants Purvin & Gertz Inc. in Singapore. “That’s pumping up the value of commodities.” Crude for December delivery rose as much as 60 cents, or 0.7 percent, to $85.29 a barrel in electronic trading on the New York Mercantile Exchange. It was at $85.28 at 10:46 a.m. Singapore time. Yesterday, the contract reached $85.36, the highest intraday price since May 4. Prices are in the longest rally since a four day run through Sept. 27. Futures have gained 7.5 percent this year.

The dollar yesterday touched $1.4179 against the 16 nation euro, the lowest since Jan. 26, and was at $1.4132 today. A decline in the U.S. currency bolsters the investment appeal of commodities as a hedge against inflation......Read the entire article.


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Crude Oil Rises to a Six Month High on U.S. Stimulus Bets

Crude oil surged to its highest level in six months as the dollar weakened against major currencies on speculation the Federal Reserve will take measures to stimulate the economy. Crude rose 1.2 percent as the dollar’s decline boosted the appeal of commodities as an alternative investment. The Fed will probably start a fresh round of stimulus tomorrow, announcing a plan to purchase at least $500 billion of long term securities, according to economists surveyed by Bloomberg News.

“It’s the weaker dollar and expectations for the stimulus package,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc. in New York. “Half a trillion dollars was supposedly priced in since we rallied from September to October, but people are already anticipating that it could be larger.” Crude for December delivery rose 95 cents to $83.90 a barrel on the New York Mercantile Exchange, the highest settlement price since May 3. Oil has risen 7.4 percent in the past year.

The Fed, meeting in Washington today and tomorrow, is expected to announce a program of securities purchases to spur growth, reduce unemployment and increase inflation, said 53 of 56 economists surveyed by Bloomberg News. The Dollar Index, which tracks the U.S. currency against six major peers, slid 0.7 percent to 76.738 at 3:25 p.m. in New York, the lowest level in two weeks on a closing basis......Read the entire article.


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Crude Oil Rises a Second Day on Chinese Manufacturing, U.S. Stimulus Speculation

Crude oil rose for a second day to trade near a two week high on speculation the Federal Reserve will take steps to stimulate the U.S. economy and on accelerating growth in China, the world’s largest energy consumer. Crude climbed above $83 a barrel before a Fed meeting where policy makers may announce a plan to buy at least $500 billion of long term securities, according to economists surveyed by Bloomberg News. Manufacturing in China and the U.S. increased in October, data yesterday showed. Consuming countries are happy with oil between $70 and $90 a barrel, said Ali al-Naimi, Saudi Arabia’s oil minister.

“Market participants want to see the result of the Fed meeting,” said Ken Hasegawa, a commodity derivative sales manager at brokers Newedge in Tokyo. “For the rest of the year, the market should be sustained around this level. Like the Saudi minister said, that’s a pretty happy price for everyone.” Crude for December delivery rose as much as 50 cents, or 0.6 percent, to $83.45 a barrel in electronic trading on the New York Mercantile Exchange. It was at $83.37 at 12:05 p.m. Singapore time. Yesterday, the contract rallied $1.52, or 1.9 percent, to $82.95, the highest settlement since Oct. 18. Futures have gained 5.1 percent in 2010.

The Fed, meeting in Washington today and tomorrow, is expected to restart a program of securities purchases to spur growth, reduce unemployment and increase inflation, said 53 of 56 economists surveyed by Bloomberg News......Read the entire article.


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Crude Oil Pares Monthly Gain as Asian Shares Decline, Dollar Rebounds

Crude oil fell in New York, trimming a second monthly gain, as Asian equities dropped and the dollar’s rebound curbed investor demand for raw materials. Crude gave up yesterday’s 0.3 percent increase as equities declined, driving the MSCI Asia Pacific Index toward its second weekly drop. Crude stockpiles in the U.S., the world’s biggest oil consuming nation, reached the highest in 17 months after surging 5 million barrels in the week ended Oct. 22, according to Energy Department data. Futures have climbed 2.2 percent this month after an 11 percent rally in September.

“There’s no real consensus in markets so that’s why you’re getting this choppy trading where people are changing their view quite regularly, and that’s creating volatility,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “It does seem to be more sentiment driven and currency driven.” Crude for December delivery declined as much as 55 cents, or 0.7 percent, to $81.63 a barrel in electronic trading on the New York Mercantile Exchange. It was at $81.71 at 1:50 p.m. Singapore time. Yesterday, the contract added 24 cents to $82.18. Prices, little changed this week, have gained 3 percent since the start of the year.

The dollar climbed 0.4 percent to $1.3876 against the 16 nation euro, damping the appeal of commodities as a hedge against inflation. The yen rose against all major currencies......Read the entire article.


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