Nov. 4 (Bloomberg) -- Crude oil traded little changed above $79 a barrel after rising yesterday on signs the U.S. economic expansion may spur fuel demand in the world’s largest energy consumer.
Oil climbed 1.9 percent to $79.60 a barrel after India’s central bank bought 200 metric tons of gold from the International Monetary Fund. Factory orders in the U.S., the world’s biggest crude consumer, rose in September for the fifth time in six months.
“People that are investing in gold are also investing in oil as a hard commodity hedge against dollar weakness,” said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “So oil just feeds off of gold and vice-versa. In general it’s the same commodity play.”
Crude oil for December delivery traded at $79.42 a barrel, down 18 cents, in electronic trading on the New York Mercantile Exchange at 11:13 a.m. Singapore time. Oil has risen 78 percent this year. Yesterday, the contract settled up $1.47, or 1.9 percent at $79.60.
Oil fell as much as 2 percent earlier yesterday on the announcement that Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc received a second bailout from U.K. taxpayers, signaling the economy may take longer to recover from the worst recession since the 1930s.
Record Gold
“Commodities overall last night seemed to take the lead from the strong move in gold prices, and that came despite the strength in the dollar,” Toby Hassall, research analyst with CWA Global Markets, said by phone from Sydney. “Oil probably tapped some strength from the economic data as well.”
Gold futures for December delivery rose $30.90, or 2.9 percent, yesterday to $1,084.90 an ounce on the Comex division of the New York Mercantile Exchange, a record settlement price. The contract touched $1,088.50, the all-time high intraday price. The previous record was $1,072 an ounce, set on Oct. 14.
The Reuters/Jefferies CRB Index of 19 commodities advanced 1.1 percent to 276.43.
The U.S. dollar was at $1.4726 to the euro at 11:11 a.m. Singapore time from $1.4724 yesterday. The greenback fell as low as $1.5016 on Oct. 21.
Prices were also supported by an industry-funded report showing U.S. crude stockpiles declined last week.
Crude oil inventories fell by 3.28 million barrels last week to 336.2 million, the American Petroleum Institute said late yesterday.
U.S. Inventories
The U.S. Energy Department is scheduled to release its supply report for the week ended Oct. 30 today at 10:30 a.m. in Washington. Analysts forecast that stockpiles would increase by 1.5 million barrels, according to the median of 16 responses in a survey conducted by Bloomberg News.
Oil-supply totals from the API and DOE moved in the same direction 75 percent of the time over the past four years, according to data compiled by Bloomberg.
The Department of Energy report is expected to show that distillate fuel inventories, including heating oil and diesel, probably declined 1 million barrels. Gasoline supplies probably increased 400,000 barrels, the survey showed.
Brent crude for December settlement was at $77.85 a barrel, down 26 cents, on the London-based ICE Futures Europe exchange at 11:07 a.m. Singapore time. The contract increased $1.56, or 2 percent, to end the session at $78.11 a barrel.
To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net.
