BLBG: Crude Oil Rebounds as Stocks Advance, Easing Growth Concerns
By Grant Smith
Nov. 4 (Bloomberg) -- Crude oil rose, recovering earlier losses, as global stock indexes advanced on better-than-expected company results.
Oil rebounded as rising stocks in Europe and Asia sent the MSCI World Index to its sixth straight gain after company earnings eased concern about profit growth. Crude slumped earlier after data yesterday showed U.S. manufacturing shrank last month at the fastest pace in 26 years.
``European stock markets have proved resilient this morning despite negative bank and auto news, and some of that is feeding into the commodities space,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``U.S. election fever is building to a crescendo and likely to bring a feel-good factor to Wall Street this afternoon.''
Crude oil for December delivery climbed as much as $1.52, or 2.4 percent, to $65.43 a barrel on the New York Mercantile Exchange. The contract traded at $65.34 at 12:36 p.m. in London. It earlier declined as much as $1.66 or 2.6 percent.
Brent crude oil for December settlement on London's ICE Futures Europe exchange was up 18 cents at $60.66. Earlier, Brent fell as much as 3.5 percent to $58.38, the lowest since Feb. 20, 2007.
U.S. crude oil inventories probably rose for a sixth week because of declining demand, according to a Bloomberg survey before tomorrow's Energy Department report. Credit Suisse Group AG, Switzerland's second-biggest bank, cut its 2009 price forecast to $58 a barrel from $73 on prospects of weak demand in China.
`Sluggish Demand'
``U.S. demand is sluggish; it will stay weak, and I'm not expecting the emerging markets will be able to support demand,'' Bayram Dincer, a commodity research analyst at Dresdner Bank, said by phone from Zurich. ``The market will probably test $60, and maybe we will have new lows of $55 this year.''
Oil production by members of the Organization of Petroleum Exporting Countries averaged 32.18 million barrels a day last month, down 70,000 barrels from September, a Bloomberg News survey of oil companies, producers and analysts showed yesterday.
OPEC members Nigeria, Iran, Kuwait and the United Arab Emirates have cut shipments to customers. Saudi Arabia, the world's biggest oil producer, hasn't yet notified customers of any reduction in shipments.
To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net
