MW: Oil futures fall after 10% surge; supply data ahead
By Polya Lesova, MarketWatch
NEW YORK (MarketWatch) - Crude-oil futures fell early Wednesday, giving up some ground after soaring more than 10% in the previous session, as traders awaited the latest data on U.S. petroleum supplies due later today.
Oil for December delivery fell $2.02 to $68.52 a barrel in electronic trading on Globex.
"Crude prices were lower amid profit-taking following a sharp rally yesterday and as the dollar appreciated after Barack Obama's victory in the U.S. presidential elections," wrote analysts at Sucden Research in a report.
On Tuesday, commodities rallied across the board, with December oil surging $6.62, or 10.4%, to close at $70.53 a barrel on the New York Mercantile Exchange.
In a historic election Tuesday, Sen. Obama of Illinois rode massive voter turnout to a sweeping victory over Sen. John McCain, becoming the first African-American elected as the nation's chief executive. Read more.
The U.S. dollar was higher against most major counterparts. The dollar index , a measure of the greenback against a trade-weighted basket of six currencies, stood at 85.00, up from 84.533 in North American trade late Tuesday. See currencies.
"The [oil] market is still dealing with the long-term effects of world financial problems and lower demand," said Darin Newsom, a senior analyst at DTN.
"Tuesday's rally still looks like nothing more than non-commercial short-covering," he said. "While the market could post a short-term rally, I'm not looking for a major change in trend until supply and demand begin to change."
Supply data ahead
Energy traders also looked ahead to Wednesday's data on U.S. petroleum supplies, which will cover the week ended Oct. 31.
Analysts at MF Global expect the data to show that crude supplies climbed by 2.1 million barrels last week. They are also looking for a rise of 800,000 barrels in distillate inventories and a 1.5 million-barrel decline in motor gasoline stocks.
On average, industry analysts polled by Platts expect to see a climb of 500,000 barrels in crude supplies, a rise of 1.4 million barrels in distillate stocks, and a decline of 1.1 million for motor gasoline supplies.
Also on the Globex Wednesday, December reformulated gasoline fell 4 cents to $1.49 a gallon and December heating oil dropped 5 cents to $2.11 a gallon.
December natural gas futures dropped 9 cents to $7.13 per million British thermal units.
