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Oil falls as dollar rises, stocks slide
Source: Agencies |
October 28, 2010, Thursday
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OIL prices fell yesterday as the dollar grew stronger and stocks slid on fresh concerns about what the Federal Reserve may do to help stimulate the U.S. economy.
Benchmark crude for December delivery fell 61 cents to settle at US$81.94 a barrel on the New York Mercantile Exchange.
The dollar was stronger after the Wall Street Journal reported the Fed next month may start buying Treasury bonds, but fewer and at a slower rate than many expected, as it moves to boost the economy with "quantitative easing."
"The market's been pushed higher for a month and half on all this talk of quantitative easing," said Tom Bentz, an analyst at BNP Paribas Commodity Futures. "In my mind, it's already been factored into price."
Stocks fell amid speculation about next week's Fed meeting and mixed earnings and economic reports.
The Dow Jones industrial average was down over 90 points by late afternoon. The Standard and Poor's 500 index and the Nasdaq composite index also fell.
Meanwhile, traders got mixed signals from the government's weekly oil and gasoline inventory report.
The Energy Department said commercial crude inventories rose 5 million barrels to 366.2 million barrels. That's much more than the 1.5 million barrel increase expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.
Gasoline inventories fell 4.4 million barrels, the Energy Information Administration said.
Linda Rafield, Platts senior oil analyst, said oil supplies grew because imports rebounded. She said gasoline stocks shrank as implied demand rose from the previous week by 466,000 barrels a day to 9.358 million barrels per day. That level is normally seen in peak driving season. Implied demand is the amount of gasoline moving through the distribution system, not actual end consumption.
In other Nymex trading, heating oil slipped 1.17 cents to close at US$2.2383 a gallon and gasoline rose 0.80 cent to US$2.1020 a gallon. Natural gas lost 6.2 cents to close at US$3.292 per 1,000 cubic feet. yesterday was the last trading day for the November natural gas contract, and most interest shifted to the December contract, which settled 0.3 cent lower at US$3.763 per 1,000 cubic feet.
In London, Brent crude fell 43 cents to settle at US$83.23 a barrel on the ICE Futures exchange.
Benchmark crude for December delivery fell 61 cents to settle at US$81.94 a barrel on the New York Mercantile Exchange.
The dollar was stronger after the Wall Street Journal reported the Fed next month may start buying Treasury bonds, but fewer and at a slower rate than many expected, as it moves to boost the economy with "quantitative easing."
"The market's been pushed higher for a month and half on all this talk of quantitative easing," said Tom Bentz, an analyst at BNP Paribas Commodity Futures. "In my mind, it's already been factored into price."
Stocks fell amid speculation about next week's Fed meeting and mixed earnings and economic reports.
The Dow Jones industrial average was down over 90 points by late afternoon. The Standard and Poor's 500 index and the Nasdaq composite index also fell.
Meanwhile, traders got mixed signals from the government's weekly oil and gasoline inventory report.
The Energy Department said commercial crude inventories rose 5 million barrels to 366.2 million barrels. That's much more than the 1.5 million barrel increase expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.
Gasoline inventories fell 4.4 million barrels, the Energy Information Administration said.
Linda Rafield, Platts senior oil analyst, said oil supplies grew because imports rebounded. She said gasoline stocks shrank as implied demand rose from the previous week by 466,000 barrels a day to 9.358 million barrels per day. That level is normally seen in peak driving season. Implied demand is the amount of gasoline moving through the distribution system, not actual end consumption.
In other Nymex trading, heating oil slipped 1.17 cents to close at US$2.2383 a gallon and gasoline rose 0.80 cent to US$2.1020 a gallon. Natural gas lost 6.2 cents to close at US$3.292 per 1,000 cubic feet. yesterday was the last trading day for the November natural gas contract, and most interest shifted to the December contract, which settled 0.3 cent lower at US$3.763 per 1,000 cubic feet.
In London, Brent crude fell 43 cents to settle at US$83.23 a barrel on the ICE Futures exchange.
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