Oil down for second day on dollar rebound, output speculation

Oil down for second day on dollar rebound, output speculation

Sydney: Oil fell for a second day on 13 November, as the US dollar held on to its recent rebound and traders weighed up the prospect of another OPEC output increase.

US light crude for December delivery fell 17 cents to $94.45 a barrel by 10:34 am IST, recovering from early lows after Saudi oil minister Ali al-Naimi said the producer group would not act on output at a summit this week in Riyadh.

London Brent crude was down 19 cents at $91.79.

US oil has fallen about $4 from its record of $98.62 a barrel 6 November, weighed down by profit-taking on concerns of a slowing US economy and signs that OPEC may finally take action to stem a more than one-third rise since mid-August.

Naimi said on 11 November that an output increase will be discussed at an upcoming meeting of the producer group. That would come on top of the 5,00,000 barrels per day (bpd) rise that the kingdom convinced OPEC to agree at a September meeting.

But he told the Financial Times in an interview published on Tuesday that “there will be absolutely no discussion" of an output rise during this week’s Riyadh summit, shifting the focus to OPEC’s next official policy meeting on 5 December 5 in Abu Dhabi.

“The market is very jittery at the moment and the decline has been driven by comments from OPEC," said Peter MacGuire, managing director of Commodity Warrants Australia in Sydney.

A rebound in the U.S. dollar, which on 12 November posted its biggest one-day gain versus the euro in over a year, also helped pull down crude oil futures. It held most of those gains in next day’s trade, but remained near an 18-month low versus the yen.

That recovery also kept other commodities on edge after a wider sell-off that took 3.5% off gold prices on 12 November. Spot gold was flat by midday after recouping earlier losses.

Traders will also be focusing on the weekly U.S. crude inventory data, which will be released a day later than normal on 15 November.