BLBG: Oil Trades Near $79 After Falling on Stockpiles, Gain in Dollar
By Ben Sharples
Nov. 11 (Bloomberg) -- Oil traded near $79 a barrel in New York after falling as an industry report showed an increase in crude stockpiles and the dollar climbed, curbing the appeal of commodities to investors.
Oil declined 0.5 percent yesterday after the American Petroleum Institute said crude inventories increased 1.22 million barrels last week to 337.5 million. The U.S. government will report supply figures tomorrow. Prices also fell as the dollar rose against the euro. China is due to announce figures for industrial production, inflation and investments today.
The API data “ may be slightly bearish for the oil price,” David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “Commodity markets are now waiting for the Chinese economic data due out later today.”
Crude oil for December delivery traded at $79.15 a barrel, up 2 cents, in electronic trading on the New York Mercantile Exchange at 12:31 p.m. Sydney time. Yesterday, the contract fell 38 cents to settle at $79.05. Prices have gained 77 percent since the start of the year.
The dollar traded at $1.4986 per euro at 10:26 a.m. in Sydney, from $1.4993 yesterday. A stronger dollar reduces the attractiveness of oil and other physical assets as a hedge against inflation.
The Energy Department will report that U.S. inventories of crude oil rose 1 million barrels last week, according to the median of 15 estimates by analysts surveyed by Bloomberg News.
Veterans’ Day
The department is scheduled to release its weekly report tomorrow at 11 a.m. in Washington, a day later than usual because of the Veterans’ Day holiday today.
The Petroleum Institute collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Weaker U.S. equities also weighed on oil prices yesterday, with most stocks falling as earnings disappointed investors. Eight stocks dropped for every five that rose on the New York Stock Exchange.
Tropical Depression Ida weakened and blew ashore on the U.S. mainland yesterday. Chevron Corp. said its Mississippi refinery was unaffected and Murphy Oil Corp. plans to resume output at its offshore Thunder Hawk platform today.
The International Energy Agency cut its long-term forecast for global oil demand yesterday as the economic crisis reduces consumption in developed economies and environmental policies encourage alternative energy use.
Global oil demand is expected to advance 1 percent a year to 105 million barrels a day by 2030 from 85 million in 2008, the adviser to 28 nations said in its annual World Energy Outlook. The figure is below last year’s 2030 estimate of 106 million barrels a day.
Brent crude for December settlement traded near $77.60 a barrel, up 10 cents on the London-based ICE Futures Europe exchange at 12:10 p.m. in Sydney. Yesterday, the contract fell 27 cents, or 0.3 percent, to end the session at $77.50.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
