Crude Oil Declines on Stronger Dollar, Forecast of Gain in U.S. Inventory

Crude oil declined for the first time in three days as the dollar gained against the euro, reducing the appeal of commodities as an alternative investment. Oil slipped as much as 2.1 percent after the euro weakened amid concern that the Greek financial crisis will trigger a default on debts by other European countries. Prices also dropped on forecasts that a government report tomorrow will show U.S. oil supplies increased last week.

“There’s a healthy amount of skepticism about both the global economic situation and sovereign debt problems in Europe,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy commodities. “This is leading to the revival of the dollar as a safe haven, which is hitting oil.”

Crude oil for April delivery fell 90 cents, or 1.1 percent, to $80.97 a barrel at 11:05 a.m. on the New York Mercantile Exchange. Yesterday, the contract rose 37 cents to $81.87, the highest settlement since Jan. 11.

Oil, equities and the dollar have rebounded from a year ago, when the Standard & Poor’s 500 Index fell to its lowest level since the collapse of Lehman Brothers Holdings Inc. Oil is up 72 percent, and the S&P Index has risen 68 percent since March 9 last year.

The greenback traded at $1.3573 per euro, up 0.4 percent from $1.3634 yesterday. It was the first increase in three days. “Economic concerns are hitting the oil market,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York. “Worries about sovereign debt in Europe are seeping into the market and giving the dollar a boost”.....Read the entire article.



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Crude Oil Fluctuates as Dollar Rises Against Euro, Stocks Increase

Crude oil fluctuated as the dollar climbed against the euro, equities increased on higher than estimated earnings and U.S. economic data signaled the global recovery is gaining momentum. Oil traded in a $1.22 range today as the greenback rose 0.9 percent against the European currency. A falling dollar reduces the appeal of commodities as an alternative investment. Futures gained the most in more than four months yesterday as the dollar declined against the euro and equities surged.

“Today’s much the same as yesterday, we will be guided by the dollar and equities,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “We are stuck in a $1 range today and will see if there will be a breakout in either direction.” Crude oil for March delivery fell 18 cents to $76.83 a barrel at 10:53 a.m. on the New York Mercantile Exchange. Futures touched $77.82 a barrel, the highest level since Feb. 3.

The dollar traded at $1.365 per euro from $1.377 yesterday. The common currency has weakened 4.6 percent against the dollar this year, partly because of concern over the euro zone’s stability in the face of large debts in Greece and other states. “There’s been a huge rotation of assets in all of the capital markets because of worries about European debt,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses of food and energy commodities. “Once these worries ease, prices should trade at the $80 level”....Read the entire article.

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Oil Rises From Seven Week Low on Forecast for More U.S. Storms

Oil rose for the first time in four days as the U.S. mid-Atlantic region braced for a new winter storm in coming days and dug out from a weekend blizzard. Oil rebounded from a seven week low after the National Weather Service issued storm warnings from Utah to New Jersey and advisories for below-normal temperatures in the East that would increase demand for heating fuel. The weekend storm left almost 40 inches of snow in some places and shut government offices today in Washington.

“The cold weather is persisting here, and it’s not relenting,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy commodities. Oil prices also advanced amid technical support at the 200 day moving average of $70.72, he said. Crude oil for March delivery rose 85 cents, or 1.2 percent, to $72.04 a barrel at 11:02 a.m. on the New York Mercantile Exchange. Oil settled at $71.19 on Feb. 5, the lowest price since Dec. 15. Futures have gained 79 percent in the past year.

The National Weather Service is forecasting temperatures will be below normal for the next six to 10 days along the Eastern Coast, from Florida to Maine. “A very wintry and unseasonably cold week remains on tap from the southern plains and Midwest to the Northeast and mid-Atlantic,” said Jim Rouiller, a senior energy meteorologist at private forecaster Planalytics Inc., in Wayne, Pennsylvania. The new storm may reach “crippling proportions from Washington and Philadelphia to New York City and possibly Boston by Wednesday”....Read the entire article.


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Crude Oil Falls After Report Shows Bigger Than Forecast U.S. Supply Gain

Crude oil fell after an Energy Department report showed a bigger than forecast increase in stockpiles as refineries idled units and imports climbed. Supplies rose 2.32 million barrels to 329 million last week, the report showed. A 400,000 barrel gain was forecast, according to the median of 16 analyst responses in a Bloomberg news survey. Refineries operated at the lowest rate in more than a year as fuel demand lagged behind year earlier levels.

“The crude number was surprisingly large,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas based energy consultant. Crude oil for March delivery fell 24 cents, or 0.3 percent, to $76.99 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Prices jumped as much as 81 cents and slipped 71 cents during the session. Oil traded at $77.17 a barrel before the release of the inventory report at 10:30 a.m. in Washington.

Gasoline inventories unexpectedly dropped 1.31 million barrels to 329 million, the report showed. Supplies were 2.3 percent higher than the five year average for the period, according to the department. Stockpiles were forecast to climb by 1.4 million barrels. “The fact that gasoline inventories were down in an environment where demand is so paltry shows that refiners are serious about reducing fuel stockpiles,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy commodities.....Read the entire article.

The "Super Cycle" in Gold and How It Will Affect Your Pocketbook in 2010

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