Crude oil trades near nine-day low
Oil traded near the lowest in nine days as European debt concerns drove the dollar higher, outweighing gains driven by speculation Asia’s recovery is stoking fuel demand.
Crude futures pared a 0.7pc increase as the US currency strengthened, making commodities priced in the dollar more expensive. Futures rose for the first time in three days earlier after data showed the Japanese economy grew faster than expected.
“People are looking more at the macroeconomic indicators and not the specific fundamental indicators,” said John Vautrain, a senior vice president at energy consultants Purvin & Gertz Inc in Singapore. “Euro concerns end up pushing the dollar higher and when it goes up, oil goes down.”
December crude futures were at $85.02 a barrel, up 14 cents, in electronic trading on the New York Mercantile Exchange at 3:47pm Singapore time.
The contract earlier added as much as 56 cents to $85.44. Oil declined to $84.88 on November 12, the lowest close since November 3. Prices are up 7.2pc this year.
The dollar appreciated against all but one of its 16 most- traded peers today.
Japan’s gross domestic product increased an annualised 3.9pc in the three months ended September 30, the Cabinet Office said in Tokyo today. The median forecast of 21 economists surveyed by Bloomberg News was for a 2.5pc gain.
“It gives further evidence of that Asian recovery,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd in Melbourne.
“You’ve seen the recovery in China and the positive spill-over effects for those economies in the Asian region. Up until now, you haven’t really seen it as much in Japan.”
Oil dropped 2.3pc last week on speculation China will raise interest rates, damping growth in the world’s biggest energy consumer.
Concern that steps by the Chinese government to cool the economy may damp fuel prices, according to Purvin & Gertz’s Vautrain.
“The Chinese government is interested in tapering the economy a bit,” he said.
Chinese demand for fuel has surged this year. Oil processing rose to a record last month after refiners increased production to ease a domestic fuel shortage.
Plants refined 37 million metric tons, or about 8.8 million barrels a day, in October, up 12pc from a year earlier, China Mainland Marketing Research Co said November 11.
Brent crude oil for December settlement was at $86.52, up 18 cents, on the ICE Futures Europe exchange in London.
The contract earlier climbed 0.5pc. The future expires today. The more actively traded January derivative was up 11 cents at $86.64 a barrel.