BLBG: Crude Oil Falls as Dollar’s Gain Curbs Demand for Commodities
By Mark Shenk
Nov. 17 (Bloomberg) -- Crude oil fell as the dollar gained, curbing demand for commodities, and before a government report that’s forecast to show U.S. stockpiles increased.
Oil slipped as much as 1 percent as the U.S. currency rose from a 15-month low against the Dollar Index. An Energy Department report tomorrow may show that crude supplies climbed, a Bloomberg News survey showed. Prices added 3.3 percent yesterday as the dollar tumbled and equities jumped.
“We’re in the midst of a battle between the bearish fundamentals and the bullish effects of a weak dollar and rising equities,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “There was a big run-up yesterday on the falling dollar and rising stock market, and now we’re taking a little breather.”
Crude oil for December delivery fell 26 cents, or 0.3 percent, to $78.64 a barrel at 9:11 a.m. on the New York Mercantile Exchange. Prices are up 76 percent this year. Yesterday’s increase was the biggest since Sept. 30.
The Dollar Index, which tracks the currency against the U.S.’s biggest trading partners, increased 0.6 percent to 75.314. The gauge touched 74.679 yesterday, the lowest level since August 2008.
The Standard & Poor’s 500 Index climbed to a 13-month high yesterday.
Inventories of crude oil climbed 505,000 barrels in the week ended Nov. 13 from 337.7 million the prior week, according to the median of 16 estimates by analysts. The Energy Department is scheduled to release its weekly report on supplies tomorrow at 10:30 a.m. in Washington.
OPEC Production
The Organization of Petroleum Exporting Countries will leave its crude production target “as is” at a December meeting and will ask members for better adherence to quotas, Kuwait’s oil minister said.
“We will ask for more compliance, that’s all,” Sheikh Ahmed al-Abdullah al-Sabah said in Kuwait City today. The group’s average compliance with its goal of cutting output should be more than 65 percent, he said.
OPEC will meet on Dec. 22 in Luanda, Angola, to discuss output targets, after agreeing to leave them unchanged at the past three meetings.
Brent crude oil for January settlement fell 36 cents, or 0.5 percent, to $78.40 a barrel on the London-based ICE Futures Europe exchange.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
