Crude declined 0.4 percent yesterday after the Energy Department reported fuel consumption fell 0.7 percent to 18.3 million barrels a day last week, the lowest level since November. Refiners operated at only 81.9 percent of their capacity, the lowest since March, as plants are closing for maintenance on their gasoline making units before demand for winter rises.
“Price weakness was a function of reduced crude oil demand by refiners,” Stephen Schork, president of the Schork Group Inc., said in a report today. “With the switch over from summer grade gasoline to winter grade, refiners shutter their crackers for routine maintenance.”
The November contract traded at $82.82 a barrel, up 13 cents, in electronic trading on the New York Mercantile Exchange at 11:54 a.m. Singapore time. Yesterday crude lost 32 cents to $82.69. Prices have gained 4.3 percent this year.
Futures earlier rose as much as 0.3 percent to $82.97 before the U.S. currency climbed, limiting investors’ need for assets such as commodities to hedge against inflation.
The dollar strengthened 0.4 percent to $1.4035 per euro, from $1.4084. It touched $1.4122 yesterday, the weakest level since Jan. 26. A weaker U.S. currency increases the appeal of commodities as an alternative investment.
U.S. initial jobless claims unexpectedly increased to 462,000 in the week to Oct. 9, a Labor Department report showed.
“It’s clear the U.S. economy is still barely holding on,” Mike Sander of Sander Capital Advisors in Seattle, said in an e- mailed note today. “Oil is still fighting resistance in the $83 price range. I see the price of oil staying between the range of $85 and $75 for the near future.”
U.S. refiners processed a total of 14.4 million barrels a day in the week ended Oct. 8, the lowest since the period ending March 19, the Energy Department said.
U.S. gasoline stockpiles decreased 1.77 million barrels to 218.2 million last week, the Energy Department said. They were forecast to slip 1.5 million barrels, according to the median of 19 analyst estimates in a Bloomberg survey before the report.
Crude inventories dropped 416,000 barrels to 360.5 million, the report showed. Supplies were were estimated to jump 1.45 million barrels, the Bloomberg News survey shows.
OPEC Meeting
Representatives from Venezuela and Libya at a meeting of the Organization of Petroleum Exporting Countries in Vienna said oil at $100 a barrel would compensate producers for a slide in the dollar without derailing the global economic recovery.
Crude at $90 to $100 won’t “harm” growth, Venezuelan Energy and Oil Minister Rafael Ramirez said. Schorki Ghanem, chairman of Libya’s National Oil Corp., also called for higher prices even as other nations said they were content with levels of $70 to $85 a barrel.
OPEC, which accounts for about 40 percent of global crude supply, agreed to leave oil-production quotas unchanged and called on members to improve compliance with the group’s self - imposed production limits.
Brent crude for December settlement was at $84.28 a barrel, up 8 cents, on the ICE Futures Europe exchange in London.
