Crude oil futures pared losses after a U.S. government report showed an unexpected drop in supplies of gasoline. Gasoline inventories plunged 4.39 million barrels to 214.9 million in the week ended Oct. 22, the Energy Department said today in a weekly report. Stockpiles were forecast to increase by 625,000 barrels, according to the median of 16 analyst estimates in a Bloomberg News survey. Inventories of crude oil rose 5.01 million barrels to 366.2 million, the department said. Supplies were forecast to climb by 1 million barrels. Crude oil for December delivery fell $1.16, or 1.4 percent, to $81.39 a barrel at 10:35 a.m. on the New York Mercantile Exchange. Oil traded at $80.76 a barrel before the release of the report at 10:30 a.m. in Washington. Oil also dropped after orders for U.S. non-military capital equipment excluding airplanes dropped in September, indicating gains in business investment will cool. Bookings for such goods, including computers and machinery meant to last at least three years, fell 0.6 percent after a 4.8 percent gain in August that was smaller than previously estimated, figures from the Commerce Department showed today in Washington. Total orders climbed 3.3 percent last month, led by doubling in aircraft demand. The dollar strengthened, curbing the appeal of commodities to investors. The dollar appreciated as much as 0.6 percent to $1.3771 per euro, the strongest level since Oct. 20, before trading at $1.3803 at 8:55 a.m. in New York, compared with $1.3859 yesterday. Home Sales Sales of new homes rose in September for a second month to a pace that signals the industry is struggling to overcome the effects of a jobless rate hovering near 10 percent. Purchases increased 6.6 percent to a 307,000 annual rate, figures from the Commerce Department showed today in Washington. Demand is hovering near the record-low 282,000 reached in May. Strikes to protest measures to increase the retirement age in France forced nine of 11 refineries to shut, causing fuel shortages and disrupting exports. A quarter of France’s refinery workers agreed to go back to work after the French Senate passed the bill yesterday. Yves le Goff, spokesman for UFIP, an industry group for refineries, said today five plants are ready to resume operations and are awaiting supplies of crude oil. Workers at Total SA refineries in France are on strike today and production remains halted, a company spokesman said by phone from Paris. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net. To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

Source