SF: Oil Rises for Second Day as Dollar Slump Boosts Commodities
Sept. 27 (Bloomberg) -- Oil rose for a second day in New York as the dollar dropped against the euro, bolstering the appeal of commodities as an alternative investment.
Crude extended its 1.7 percent gain on Sept. 24 after the euro strengthened against the greenback following a report showing German business confidence at a three-year high. U.S. durable goods orders, not including volatile transportation Items, climbed by a more-than-expected 2 percent in August.
"It's a combination of the dollar and the better-than- expected durable goods number," said David Taylor, an analyst at CMC Markets in Sydney. "The durable goods orders reflect a bit more of a buoyant manufacturing sector and that's been a pivot point for the economy over the last six to 12 months."
Crude for November delivery climbed as much as 36 cents, or 0.5 percent, to $76.85 a barrel on the New York Mercantile Exchange, the highest since Sept. 14. It was at $76.79 at 8:08 a.m. Singapore time.
The gain on Sept. 24 was the biggest since Sept. 10, when the shutdown of an Enbridge Energy Partners LP pipeline curbed deliveries of Canadian oil to U.S. Midwest refineries. The November contract rose 2.1 percent last week.
Brent crude oil for November settlement rose as much as 26 cents to $79.13 on the London-based ICE Futures Europe exchange and was at $78.94. The contract gained 76 cents, or 1 percent, to end the session at $78.87 on Sept. 24.
Dollar's Drop
The price difference between Brent and West Texas futures in New York has narrowed to $2.20 a barrel today from as much as $3.45 on Sept. 21.
The dollar today fell to $1.3495 per euro, matching the level reached Sept. 24 when the U.S. currency dropped 1.4 percent to the lowest since April.
The greenback's fall on Sept. 24 helped send gold to a record and silver to a 30-year high. The Reuters/Jefferies CRB Index of 19 commodities advanced 1.2 percent to 283.63, the highest level in eight months.
Hedge funds and other market speculators reduced their bets that crude oil prices would climb for the first time in two weeks. The net-long positions held by money managers declined by 16,286 contracts, or 13 percent, to 106,323 for the week ended Sept. 21, the U.S. Commodity Futures Trading Commission said in its weekly Commitment of Traders report.
