BLBG: Crude Oil Futures Decline in N.Y. as Dollar Strengthens Against Euro, Yen
Crude fell for a second day as the dollar strengthened, reducing the investment appeal of commodities, and after Saudi Arabia signaled that OPEC may leave production targets unchanged.
Oil dropped as much as 1.1 percent after the dollar climbed from an eight-month low yesterday against the euro and a 15-year low to the yen. The Organization of Petroleum Exporting Countries, which pumps 40 percent of the world’s oil, may maintain output quotas at an Oct. 14 meeting after Saudi Arabia’s oil minister Ali al-Naimi described the market as “very well-balanced,” and said prices between $70 and $80 a barrel were “ideal.”
“The dollar is so heavily sold at the moment, creating the opportunity for a bit of strength in the dollar and softness in oil,” said Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne. “You would be leaning toward a softer oil price this week.”
Crude for November delivery fell as much as 91 cents to $81.30 a barrel in electronic trading on the New York Mercantile Exchange, and was at $81.32 at 2:24 p.m. Singapore time. Yesterday, the contract lost 0.5 percent to $82.21. Futures last week gained for a third week, the longest stretch since June.
The dollar was at $1.3818 to the euro after gaining 0.5 percent to $1.3876 yesterday in New York. The greenback recently retreated on speculation the U.S. Federal Reserve may buy more government debt to spur economic growth. The central bank is due to release minutes of its Sept. 21 policy meeting today.
Naimi ‘Happy’
Al-Naimi, speaking upon his arrival in Vienna for the OPEC meeting, said he is “happy” with current prices. The kingdom, the largest oil producer among the group’s 12 members, pumped 8.25 million barrels a day in September, according to a Bloomberg News survey.
OPEC has raised output by 5 percent from a five-year low in March 2009 and now exceeds its own target by 1.9 million barrels a day, about the same amount as Angola produces. Production was 29.1 million barrels a day last month, based on Bloomberg News estimates.
“I don’t think there will be any shift” in quotas by OPEC, Qatari Energy Minister Abdullah al-Attiyah said in an Oct. 10 interview. “Producers and consumers are happy” with current oil prices.
OPEC today will release its monthly Oil Market Report, a day before the Paris-based International Energy Agency and the Energy Department in Washington issue their own data.
Brent crude for November settlement on the London-based ICE Futures Europe exchange declined as much as 83 cents, or 1 percent, to $82.89 a barrel. Yesterday, the contract slipped 31 cents, or 0.4 percent, to $83.72.
To contact the reporters on this story: James Paton in Sydney jpaton4@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net
To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net.
