MW: Crude rises on weaker dollar as investors await OPEC
NEW YORK (MarketWatch) -- Crude-oil futures edged higher Monday, receiving a lift amid economic optimism ahead of key U.S. data this week, and ahead of Tuesday's Organization of Petroleum Exporting Countries meeting where the group is expected to leave its production quotas unchanged.
Several U.S. reports this week, including third-quarter gross domestic product, are expected to show the economy remains on the mend.
Crude for January delivery, the front-month contract that expires at the end of Monday's trading, was last up 0.7% at $73.87 a barrel. The more actively traded February contract rose 1% to $75.17.
OPEC is scheduled to meet in Angola. Abdalla Salem el-Badri, secretary-general of the cartel, said Monday "there is a consensus that there is no change [in output levels]," according to Dow Jones Newswires.
"Look for OPEC to focus more on quota compliance during tomorrow's meeting," said Brian Niemiec, an analyst at Susquehanna Financial Group, adding that cold weather, weaker dollar, and renewed geopolitical tensions could give crude a boost in the short term.
OPEC said last week in its monthly report that the 11 members bound by production quotas produced 26.6 million barrels a day of crude in November, up for an eighth straight month.
The cartel's compliance rate to its agreed quotas fell to 58% last month, according to a MarketWatch calculation. That's the lowest level since the cartel said it will cut production by 4.2 million barrels a day starting from the beginning of this year.
"We suspect prices could ease somewhat after the OPEC announcement [tomorrow], as participants will be reminded that OPEC will not be doing anything to tighten supplies anytime soon," said Edward Meir, an analyst at MF Global, in a note.
Since hitting $82 a barrel on Oct. 21, the highest level in more than a year, crude has mostly been falling. It slumped below $70 last week, the lowest level in more than two months.
Crude finished higher on Friday on reports that Iranian forces took over an oil well in a disputed region in the south of Iraq.
In currencies trading Monday, the dollar fell against the euro, with the European currency up 0.2% at $1.4362. The dollar index (DXY 77.66, -0.11, -0.15%) was down 0.3% at 77.618.
In other energy trading Monday, January gasoline futures rose 1.1% to $1.915 a gallon, January heating oil added 1.6% to $1.9877 a gallon, and January natural gas slid 0.3% to $5.763 per million British thermal units.
Natural gas jumped to an 11-month high Thursday after a report showed weekly U.S. stockpiles dropped sharply as cold temperatures across much of the nation boosted use of heating fuels.
