Oil declined, trimming its monthly gain, after Asian equity markets dropped and the dollar climbed against the euro, curbing investor demand for raw materials.
Futures gave up yesterday’s 0.3 per cent increase as Asian stocks slipped, dragging the MSCI Asia Pacific Index to its second straight weekly drop. US crude supplies are at the highest since in 17 months after surging more than 5 million barrels in the week ended Oct. 22, according to Energy Department data. Prices are up 2.4 per cent this month.
“There’s no real consensus in markets so that’s why you’re getting this choppy trading where people are changing their view quite regularly, and that’s creating volatility,” said Ben Westmore, a minerals and energy economist at National Australia Bank. “It does seem to be more sentiment driven and currency driven and obstructing from anything to do with the oil market.”
The December contract decreased as much as 49 cents, or 0.6 per cent, to $US81.69 a barrel in electronic trading on the New York Mercantile Exchange, and was at $US81.91. Yesterday it added 24 cents to $US82.18. Prices are up 0.3 per cent this week and have gained 3.2 per cent since the start of the year.
The dollar climbed 0.1 per cent versus the euro to $US1.3912 while the yen rose against all major currencies.
Equities fall
Crude dropped as the MSCI Asia Pacific Index fell 0.4 per cent, extending this week’s slide. Japan’s Nikkei 225 Stock Average decreased 1.4 per cent, while South Korea’s Kospi Index declined 0.9 per cent.
Yesterday, about five stocks dropped for every four that advanced on US exchanges. The Standard & Poor’s 500 Index climbed 0.1 per cent in New York after rising as much as 0.6 per cent. The Dow Jones Industrial Average also fell.
US gross domestic product increased at a 2 per cent annual pace in the third quarter, up from a 1.7 per cent rate in the previous three months, based on the median forecast in a Bloomberg News poll of economists before a Commerce Department report today.
The Organization of Petroleum Exporting Countries will increase shipments by 1.5 per cent in the four weeks to Nov. 13, according to Oil Movements, which monitors tanker charters. The group will export 23.41 million barrels a day during the period, the Halifax, England-based consultant said yesterday in a report. The data exclude Ecuador and Angola.
Brent crude for December settlement dropped 20 cents, or 0.2 per cent, to $US83.39 a barrel on the London-based ICE Futures Europe exchange. It closed yesterday at $US83.59, up 0.4 per cent.