Oil Falls after Biggest Monthly Gain since May 2009

October 31 00:00 2011

New York, October 31 (rainbownewsline.com) – Oil fell in New York in the wake of a surge in the U.S. dollar after Japan intervened to stem the rise of the yen for the third time this year and on the basis of speculation that demand is set to slow down. Brent’s premium to U.S. crude slid to a four-month low and futures dropped as much as 1 percent after the weakening of the yen and a technical indicator signaling prices may have risen too fast. Oil surged 18 percent in October, the biggest monthly increase since May 2009.

The former head of the International Energy Agency said that crude prices at $100 a barrel would be unsustainable. A stronger dollar typically curbs demand for commodities from holders of other currencies. Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, said, “My anticipation is that prices will consolidate,” and added that prices at $93 to $95 a barrel are “expensive.”

Crude for December delivery dropped as much as 92 cents to $92.40 a barrel in electronic trading on the New York Mercantile Exchange and was at $92:56 at 12:02 p.m. Singapore time. Prices slid 0.7 percent on Oct. 28 to $93.32.

Brent crude for December settlement was at $109.02 a barrel, down 0.8 percent, on the London-based ICE Futures Europe exchange. The contract traded at a premium of $16.46 a barrel to New York futures, which would be the lowest close since July 4. It closed at a record $27.88 on Oct. 14.

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