RTRS: UPDATE 7-Oil jumps 3 percent on dollar, U.S. consumer data
* Dollar under pressure as Obama tours China
* OPEC president says too early to talk about output
* Swelling U.S. oil stocks highlight demand weakness
(Updates prices, market activity, changes dateline from
LONDON)
By Rebekah Kebede
NEW YORK, Nov 16 (Reuters) - Oil prices rose above $78 a
barrel on Monday as a weaker dollar and better-than-expected
U.S. consumer spending data boosted prices.
U.S. crude futures for December delivery CLc1 rose $2.30
to $78.65 a barrel by 12:31 p.m. EST (1731 GMT), after reaching
a high of $79.24 a barrel.
In London, Brent crude LCOc1 gained $2.14 to $78.45.
"The main reason crude futures are up today is the weaker
dollar. The greenback fell as money traders were selling the
greenback in the face of better U.S. retail sales and business
inventories," said Phil Flynn, an analyst at PFGBest Research
in Chicago.
The U.S. dollar slipped on Monday against a basket of
currencies .DXY after the United States and China failed to
reach an agreement on currencies at an Asia Pacific summit
ahead of U.S. President Barack Obama's visit to China.
[ID:nSP43459]
Washington has said an undervalued yuan is contributing to
trade imbalances between the United States and China. A weaker
dollar typically supports commodities because dollar-priced
contracts become cheaper for buyers using other currencies.
Further support came following strong U.S. retail sales
data for last month, boosting optimism about the economy.
[ID:nN16371323]
Energy markets have been looking to wider economic data for
signs of a rebound that could boost fuel demand, which has been
hard hit by the recession.
U.S. retail sales rose 1.4 percent in October, after a drop
of 2.3 percent in September, mostly due to robust vehicle
sales. [ID:nN16507114]
The positive consumer data outweighed a report from the New
York Federal Reserve Bank showing that manufacturing activity
in the state has slowed in November.
Wall Street rose to a 13-month high on Monday as
commodity-related stocks, including oil and metals, lifted
equities. [.N]
Despite climbing oil prices, OPEC's president, Jose Botelho
de Vasconcelos, said Monday that the market was still
oversupplied and that it was too early to make any changes to
OPEC's output quotas.[ID:nLF478744]
